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Whitecap acquires XTO Energy, Air Canada forced to reduce flights and Kinross Gold makes inroads at Great Bear project

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By Louis Allen - 

Whitecap Resources (TSX: WCP) has announced it has agreed to acquire XTO Energy Canada for a total cash consideration of $1.9 billion.

XTO Energy Canada owners Imperial and ExxonMobil Canada entered into the agreement to sell their Montney and Duvernay oil and gas-producing areas of central Alberta to Whitecap Resources.

Both ExxonMobil Canadian affiliates own 50% each of XTO Energy Canada, with Imperial’s share of the proceeds sitting at $940 million.

The assets to be sold include 227,200 net hectares in the Montney shale, 34,000 net hectares in the Duvernay shale and additional holdings in other areas of Alberta.

From these assets, net production is an estimated 140 million cubic feet of natural gas per day and roughly 9,000 barrels of crude, condensate and natural gas liquids per day.

Teck Resources

Teck Resources (TSX: TECK.B) has announced a new carbon capture utilisation and storage (CCUS) pilot project at its existing Trail Operations metallurgical complex located in southern British Columbia.

The CCUS pilot project is expected to commence operation in the second half of 2023.

The project will support the company’s net zero strategy, which includes reducing the carbon intensity of Teck’s operations by 33% by 2030 and achieving net zero emissions by 2050.

The Canada-based natural resources company said if the project is successful, it could be scaled up with the capacity to capture over 100,000 tonnes of carbon dioxide per year.

Teck chief executive officer Don Lindsay said it is encouraging as the company works to reduce greenhouse gas emissions across its operations and achieve its net zero goal.

“The pilot also provides us with a technical platform to assist our steelmaking coal customers in materially reducing the carbon intensity of their steel production,” he said.

Kinross Gold

Kinross Gold (TSX: K) has declared it is making inroads at its Great Bear project in Ontario and expects to report an initial mineral resource as part of its 2022 year-end results.

The Canada-based gold and silver mining company drilled roughly 83,000 metres and looks set to complete about 200,000m of exploration and infill drilling by the year’s end.

Kinross said the latest results highlight its view of a high-grade, world-class deposit that underpins the prospect of a large, long-life mining complex.

The company said it will continue to collaborate with the Wabauskang and Lac Seul First Nations groups in studies, site planning, training, and any prospective socio-economic opportunities.

Kinross also announced it will acquire all of the outstanding and issued shares of Great Bear Resources and its Dixie project.

Feasible study work is nearly complete at Kinross’ 70% owned Manh Choh project in Alaska, with evidence of that expected to be reported in its second quarter results.

Air Canada

Canada’s largest airline, Air Canada (TSX: AC) shares dropped this week after the company announced it will be making “meaningful” reductions to its summer flight schedule in an effort to swiftly adjust passenger volumes to a more manageable level.

The company said it will cut an average of 154 flights per day out of roughly 1,000 daily flights for the next two months.

Air Canada chief executive officer Michael Rousseau said the times are unpredictable and relevant changes are appropriate to deal with them.

“This surge in travel has created unprecedented and unforeseen strains on all aspects of the global aviation system,” he said.

The majority of the flights set to be affected are smaller flights in the evening and late at night, involving domestic and US journeys.

The airline has revealed it will also suspend flights between Montreal and three cities –  Pittsburgh, Baltimore, and Kelowna, as well as between Toronto and Fort McMurray.

International flights will remain unchanged for the most part.

The news comes amid many airlines and airports struggling to return to pre-pandemic levels of travel, having to deal with COVID-19 travel restrictions, labour shortages, and restricted supply chains which result in flight delays.

In other news this week, many domestic flights to Canada’s busiest airports have been delayed or cancelled  because of the “overloaded international network”, which continues to affect the aviation industry across the globe.

According to analytics firm Data Wazo, approximately 54% of flights to Canada’s four largest airports were bumped off schedule in the seven days between 22 and 28 June, a testament to struggling airports.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX: ATD) has urged the public that the rising cost of living could be contributing to a rise in black market smokes.

Alimentation Couche-Tard chief financial officer Claude Tessier said society is resorting to other means due to inflation.

“In Canada, we felt pressure on our cigarette sales. There seems to be a transfer to the black market,” he said.

The behavioural changes throughout society don’t stop with cigarette sales, as chief executive officer Brian Hannasch believes inflation has impacted consumer behaviour in all industries, including putting less petrol in the tank each visit in the US.

“This is a sign that the pressure is mounting on consumers,” he said.

“We are lucky to see unemployment at a historic low, which means that the consumer is still in better shape than in 2008-2009 [during the global financial crisis].”

While the company is satisfied with its physical stores across the globe, it has noticed consumers are starting to purchase products at lower prices.

It’s not all doom and gloom for the convenient store giant, as RBC Capital Markets analyst Irene Nattel said the convenience store segment remains relatively resilient.

“In the current macro backdrop, Couche-Tard’s size, scale and procurement expertise should enable the company to gain [market] share,” she said.

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