Update on Calgary 'n the Alberta Oilpatch

[errolanderson]

Thank goodness for the Flames these days as the team is giving some welcomed distraction to an otherwise huge financial struggle. Here's some tidbits good and bad . . . .

Alberta's oil and gas industry in general may see its 1st accounting loss since the 1990's. But some companies with solid balance sheets and lower cost assets may come out stronger at the end of this market turmoil.

Rumblings industry cashflow may be at a 15-year low.

A no-brainer that weak royalties are no doubt a function of weak revenues. A $7 billion drop in 2015 royalties will dig a major hole in provincial revenues. Tax revenue will obviously be down sharply.

Capital investment may be cut nearly in-half. Oil sands projects will no-doubt feel-the-axe. Apparently, drilling activity is down more than 40% in the 1st quarter of 2015.

But a silver lining is that labor is freeing up and production costs are now in-decline. Bottomline, wages appear to be getting cut by at least 10% or more. Hopefully, this may benefit the ag industry.

There is no doubt a lot of oilfield equipment for sale.

A silver lining for the industry is that once prices recover somewhat, companies will be leaner 'n meaner in their cost structure. Cost of production is apt to fall.

[sumdumguy]

Hopefully by fall we will see oil rebound to at least a break-even level and oil workers can return to the patch, make their house, car and other payments and feed their families.

[PrairieDude]

Good lesson to live within ones means. Does a 20 year old kid need a 1 ton diesel all decked out pulling a trailer with new equally decked out quad/sled?

[perfecho]

We needed this correction, things were getting out of hand for wages, entitlements and values put on oil workers....but not others.
And it showed how poorly our sacred cow government was managing so poorly.....

[bucket]

Why don't government officials get the same adjustment?

Including politicians.

[furrowtickler]

We may see the same kinda hit in Ag this year - well on our way now with some prices tanking below COP.
very few people will be concerned and wages will not be cut or people laid off that service Ag- it is their god given right now to suck every last Pennie from our pockets regardless if the actual guy providing the cash for the whole system - the farmer - makes a few bucks or not.
Some Machinery companies will/are feeling the pinch. Although I have never seen so many new massive seeding outfits heading out over the past two weeks than anytime in my life. There has been a huge amount of money exchanged this spring in iron and tires from dealer lots and auction sales.
This will be an interesting year , more so than the past 10 by the time Nov/ Dec roll around if grain prices keep going down the drain .

[tweety]

Canola prices have been 10 bucks for 6 months. Hardly down the drain. Same with flax, fabas, peas, barley.....

[SASKFARMER3]

Ah tweety you know the facts. Really 10 canola is a good price for you. Really 10 in 2015 is a good price. We got 10 years ago. But hey 6.45 to 5.79 was a good price when your costs were under 100 bucks to grow the crop. Now with seed where its at 10 is a bull shit price. Also phone a friend and check what your vittera, Cargill or Richardson price is for fall. Ah 10 isn't even on the page.
Their is a problem with ag that smart farmers can see. Prices where they are going does not cover costs. Throw in a crop failure that some I guess have never had and wow shit sure changes fast.

[errolanderson]

Suncor (Canada's largest oil producer) posts a huge drop in operating profits released this morning.

More wage cuts across Ab/Sk appear likely . . . .

[riders2010]

I call bullshit on the wage cut. It's a publicity stunt to grow support to raise domestic prices even more outrageous than it is. Time to say F off to the oil industry and just produce enough to supply domestically at a lower than world oil price therefore attracting the real future in growth which is the tech and manufacturing jobs. Not just pumping out raw oil paying truck drivers more than doctors of which what percentage is it are likely terrorists ready to kill us. How stupid.
Time for someone with a real vision for the future to step forward. Unfortunately it ain t any of these three current leaders.

[ajl]

Now we are going to elect the NDP just to nail the coffin lid shut. The noise we hear is the fat lady singing. I am not surprised. The huge bloc of voters that elected AlisonREDford last time has gone to the NDP. Alberta: the last bastion of free enterprise is no more: RIP.

[bucket]

And the media and others Wil blame the ndp for the rough times.

Even though it's been the conservatives minding the store for 40 years.

[bucket]

If free enterprise in alberta was alive and well shouldn't they have a bank account to cover some bad times?


Seems it's not working out to well.

Alberta seems like a spoiled kid spending every dime with nothing to show for it.

Saskatchewan is on the same path.

[Rareearth]

Dump equalization payments, provincially.
Let business (even provincially) stand on their own, then Alberta would be the world envy, with a already great standard of living.

[bucket]

It's called corporate socialism not free enterprise.

And taxpayers foot the bill.