Royalty Review

[Longhorn]

The new royalties have little to do with the slow down in activity.

Low oil/gas prices and the new developments in shale gas recovery are the reason for the slow down.

Have you been to Ft St John, Estevan, Weyburn, Colorado??? Wonder why these locations are BOOMING right now, but yet Alberta is dead...

Royalty has played a very major role in the slowdown in Alberta. You keep mentioning shale gas, but it really is only a small factor at the moment as a shale gas well is far more expensive to drill at this time than a conventional well. Shale has been affected by the low commodity prices far greater than conventional gas has...

 

[Billy Boy]

Alberta was hit with the perfect storm; Royalty Review, slow down in the world economy (credit crisis) and the shale gas discoveries (lots of gas being discovered = low gas prices) thats why I say wait utnill next year at this time to see where things are at in the oil patch. This will not be an easy hole to dig out of.

Billy Boy

 

[Summiteer]

Have you been to Ft St John, Estevan, Weyburn, Colorado??? Wonder why these locations are BOOMING right now, but yet Alberta is dead...

Royalty has played a very major role in the slowdown in Alberta. You keep mentioning shale gas, but it really is only a small factor at the moment as a shale gas well is far more expensive to drill at this time than a conventional well. Shale has been affected by the low commodity prices far greater than conventional gas has...

Sledded with a guy That runs a hydro vac outfit from Swift current Sask a couple of weeks ago, he said things are OK in Sask, not BOOMING.... lots of propaganda from the industry to squeeze more cash from the province......It's good to spread chit out a bit, send the chinese "tradesmen" home. Let the booms happen elsewhere, they can deal with the labor shortages and crackheads for a while....

 

[Summiteer]

Drilling rigs
March 12, 2010

Active Down Total % Active
Western Canada
AB 276 276 552 50%
SK 76 45 121 63%
BC 77 38 115 67%
MB 13 3 16 81%
WC Total 442 362 804 55%
Northern Canada
NT - 2 2 0%
Eastern Canada
ON - 1 1 0%
QC 1 2 3 33%
NB 1 2 3 33%
NS 1 - 1 100%
NL 1 - 1 100%
EC Total 4 5 9 44%
Canada 446 369 815 55%


Service rigs
March 12, 2010
Active Down Total % Active
Western Canada
AB 397 278 675 59%
SK 128 49 177 72%
BC 27 10 37 73%
MB 9 3 1 2 75%
WC Total 561 340 901 62%
Northern Canada
NT 1 - 1 100%
Eastern Canada
QC 1 1 2 50%
Canada 563 341 904 62

 

[Longhorn]

Sledded with a guy That runs a hydro vac outfit from Swift current Sask a couple of weeks ago, he said things are OK in Sask, not BOOMING.... lots of propaganda from the industry to squeeze more cash from the province......It's good to spread chit out a bit, send the chinese "tradesmen" home. Let the booms happen elsewhere, they can deal with the labor shortages and crackheads for a while....

Good point, but you missed MY point which was certain areas are BOOMING...Swift Current is not one and cannot be lumped in with Weyburn/Estevan, too far away to service from Swift. Swift kinda gets lumped in with Medicine Hat, we will both service each way.

I do however agree with you on the other issues a boom brings to the table, crappy workers, drugs, alcohol, labor shortages...

Its funny there are service companies out there right now hiring like crazy, but its all for out of town work. Weyburn/Estevan, Shaunavon on and off, Ft St John. One of the big problems right now is that so many guys dont want to work out of town. Its slowly coming back, but it will be a crappy year for the most part, then it will likely take off again. I have really enjoyed weekends off, and even the odd day here and there during the week, this hasnt happened in the past 5 years...

 

[Summitric]

I'd like to know a little more about that newest party platform, and maybe consider running for government.......

 

[snochuk]

I don't think things will ever be the same, shale gas is now where it's at.

From what I've heard is the new royalty rates are about the same as B.C.

The oil companies are stealing the oil/gas here compared to the royalties they gladly pay in other countries... And they do alot of permanent damage especially in the tar sands.

I have worked and lived in Ft. Mac and the land that has been reclaimed by Syncrude and Suncor is where the Buffalo Ranch is. As a farmer this is by far the nicest land in the area. Have you walked through the Swan Lake reclamation behind the Sandstone Buffalo? I'll take that over the muskeg swamps any day. The dirtiest part of the area is the tailings ponds.....and how many ducks get shot in one day of hunting season. Not saying the tarsands is a clean business, just don't paint it to bleak.
I'm not sure how many people know this but the Nation Energy Board got a law passed that increased clear access to I believe 200' on either side of a pipeline and this includes private farmland. Farmers can be billed for any damages and must get a clearance to work in this area over 11" deep. Yes this is basically every pipeline in Alberta. A.K.A. you can't put a fence post in the ground on your own land in this area without approval from the oil company. Oh and no farmer gets any compensation for such inconveniences!!
Slimmy bastages!!!!!!!

 

[snochuk]

A little off topic but I feel a little better now

 

[RMK Junky]

The pace needs to slow down and balance things out for the whole year. 4 or 5 months worth of work to cover one for a whole year is rediculas to say the least. I've alwasys banked for a 2 month breakup not 6 months. These oil companies starve everyone to the point of almost extinction (unfortuneatly many have fallen ) then drive the rates into the crapper because the ones left standing are stumbling over one another when the work comes around again. The royalty axe and the economic slow down came at the perfect time I guess. Government greed took over and things came full circle. Things do sound alittle promising for 2010/2011 but that is pure speculation. So I guess the trick is to be prepared to sit back and see what happens....if you can aford it

 

[Longhorn]

That will be the key...survival, and like you said many havent made it already...

I spent almost 4 years contracting to a local pipeline co here and they went broke in July of last year, over 300 guys out of work. Last week, Advantage Pipeline, they do a bunch in GP as well, they too are in receivership, there is another 250+ out of work...The list goes on and on, kinda depressing...

 

[ZRrrr]

Drilling rigs
March 12, 2010

Active Down Total % Active
Western Canada
AB 276 276 552 50%
SK 76 45 121 63%
BC 77 38 115 67%
MB 13 3 16 81%
WC Total 442 362 804 55%
Northern Canada
NT - 2 2 0%
Eastern Canada
ON - 1 1 0%
QC 1 2 3 33%
NB 1 2 3 33%
NS 1 - 1 100%
NL 1 - 1 100%
EC Total 4 5 9 44%
Canada 446 369 815 55%


Service rigs
March 12, 2010
Active Down Total % Active
Western Canada
AB 397 278 675 59%
SK 128 49 177 72%
BC 27 10 37 73%
MB 9 3 1 2 75%
WC Total 561 340 901 62%
Northern Canada
NT 1 - 1 100%
Eastern Canada
QC 1 1 2 50%
Canada 563 341 904 62

Looks like AB is not hurting as bad as people make it out to be. Seems to me these oil companies NEED Alberta. Good info. Thanks!

 

[Longhorn]

Looks like AB is not hurting as bad as people make it out to be. Seems to me these oil companies NEED Alberta. Good info. Thanks!

50% rig utilization is not good...but it is better than the 12-14% we have been seeing, but breakup is days away or already here depending on where you are working...Rigs are racked down here already...

 

[Pinner]

Have you been to Ft St John, Estevan, Weyburn, Colorado??? Wonder why these locations are BOOMING right now, but yet Alberta is dead...

You don't know what dead is. Find out about 1981.

These places are not BOOMING at all, this is the worst year in at least 10.

Ft. Nelson, (Horn River shale) Ft. St. John, (Montney shale) Estevan, (Barnett shale) Weyburn, (Big Horn shale)

Royalty has played a very major role in the slowdown in Alberta. You keep mentioning shale gas, but it really is only a small factor at the moment as a shale gas well is far more expensive to drill at this time than a conventional well. Shale has been affected by the low commodity prices far greater than conventional gas has...

If you think shale gas is only a small factor think again...

Shale gas is expensive upfront, but profitable on the backside.

Just wait untill they are producing shale gas in Quebec, Illinois and New York, our gas will be shipped to the west coast bound for the orient.

 

[Summiteer]

Normal looks dead compared to the last 10 years. Had the government done its job for the last dozen or so years and staggered the project starts in Mcmurray and throughout the province, we would have had work and resources for decades to come. The city of Ft Mcmurray as well as the rest of the Province would have been able to keep up with infrastructure, plus we wouldn't have had the huge influx of people causing the strain on our health care and education system. But when you know you're going to win the election no matter how drunk or stupid you are, why try?

 

[Orrin]

50% utilization is 50% unemployment and this is only for January, Febuary and March the rest of the year it'll be 25% at best, I can imagine the crying and whining from other sectors if all of a sudden 50-75% of their labour force got sent home. The royalties killed Alberta, I work in downtown Calgary and know many guys in senior management of many companies and they all agreed that it wasn't worth operating in Alberta, many went so far as to shut in gas wells and save them for future production while simultaneously spending their cap ex dollars elsewhere. The popular sentiment for this royalty review so far is that they are worried that this is a mouse trap and once they reinvest the trap will slam shut again, so don't look for this review to bring instant business in 2011 until the govt. proves that they are willing to maintain a stable operating environment. One more thing I should mention is that the capitol on which these oil companies run on is mostly from the east and it's the money holders who make the final cap ex decisions so even if Calgary wanted to drill Toronto and New York have to be sold on it first and cut the $$$ loose.

 

[Summiteer]

50% utilization is 50% unemployment and this is only for January, Febuary and March the rest of the year it'll be 25% at best, I can imagine the crying and whining from other sectors if all of a sudden 50-75% of their labour force got sent home. The royalties killed Alberta, I work in downtown Calgary and know many guys in senior management of many companies and they all agreed that it wasn't worth operating in Alberta, many went so far as to shut in gas wells and save them for future production while simultaneously spending their cap ex dollars elsewhere. The popular sentiment for this royalty review so far is that they are worried that this is a mouse trap and once they reinvest the trap will slam shut again, so don't look for this review to bring instant business in 2011 until the govt. proves that they are willing to maintain a stable operating environment. One more thing I should mention is that the capitol on which these oil companies run on is mostly from the east and it's the money holders who make the final cap ex decisions so even if Calgary wanted to drill Toronto and New York have to be sold on it first and cut the $$$ loose.

Look around, unemployment is up everywhere.......and everyone is whining....276 of 446 active rigs in all of western Canada are in Alberta....Can't be all that bad. 276 of 362 down rigs are still in Alberta..coming up on breakup...Not the end of the world.....

 

[Pinner]

The royalties killed Alberta,

The price of gas had nothing to do with it

The oil companies would have happily drilled unprofitable conventional wells at a loss without the royalty changes. Just because their in it for the lifestyle.

 

[Orrin]

Look around, unemployment is up everywhere.......and everyone is whining....276 of 446 active rigs in all of western Canada are in Alberta....Can't be all that bad. 276 of 362 down rigs are still in Alberta..coming up on breakup...Not the end of the world.....

For 2 1/2 out of 12 months the rigs are at half capacity, that's supposed to be good? Give your head a shake. But hey, I'm busy my rigs are overseas so I guess I shouldn't care about all the underemployed and unemployed young people in Alberta. Incidentally Alberta is the only province to see a raise in unemployment in the last two months, I wonder how many service companies are laying off cause the oilpatch, up and downstream, here is still in the toilet. As mentioned before companies are still going under, hopefully sometime next year the trend will reverse.

 

[rigrat]

For 2 1/2 out of 12 months the rigs are at half capacity, that's supposed to be good? Give your head a shake. But hey, I'm busy my rigs are overseas so I guess I shouldn't care about all the underemployed and unemployed young people in Alberta. Incidentally Alberta is the only province to see a raise in unemployment in the last two months, I wonder how many service companies are laying off cause the oilpatch, up and downstream, here is still in the toilet. As mentioned before companies are still going under, hopefully sometime next year the trend will reverse.

Glad to see someone knows what they are talking about! I agree 110%

 

[Pinner]

With a little research I've found that there are MORE rigs drilling this week than there was in 2007... 299 in 2010 vs. 239 in 2007

Therefore one could conclude, the royalty rate changes have increased drilling activity despite the very low price of gas.:d (And the early spring)

Hey if you as a province don't mind doing the poor oil companies (that are only making gazillions of dollars selling your natural resources), a favor, go ahead.... Give them a tax break. Just like they give you a break at the pump.