Archive for April, 2015

Calgary Herald

Excellence, like beauty, is evidently in the eye of the beholder.

The assessment from Saudi Prince Abdulaziz bin Salman this week that global oil markets are in “excellent” condition is unlikely to be echoed when Canada’s oil and gas producers begin to report financial results Wednesday after a bruising first quarter.

The definition of “excellent” is clearly subjective.

Presumably it’s influenced by the view from Saudi Arabia’s massive low-cost oil reserves versus the perspective of the producers of Canada’s almost as massive but far-more-expensive-to-produce reserves.

Oilfield services company Precision Drilling Corp. set the tone in Canada on Monday when it revealed drilling in North America “failed to meet even the most pessimistic forecasts” in a quarter where it shed 2,200 workers and earnings fell more than 76 per cent from a year earlier to $24 million.

Expect more of the same message when producers — starting today with Cenovus Energy Inc. and Suncor Energy Inc. — issue results from what is traditionally the…

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Financial Post

If you’re looking for signs of further strength in oil prices, one of the best places these days is the U.S. rig count.

Energy services firm Baker Hughes Inc. reported that oil drillers idled 31 rigs last week, exceeding the previous week’s decline of 26 and marking the third consecutive sharp pullback.

Some of the weakness may be the result of contracts rolling off, but Justin Bouchard at Desjardins Capital Markets said the reading supports the view that U.S. supply growth is nearing a critical inflection point.

The analyst noted that the decline of more than 50 per cent in drilling activity, coupled with deferred well completions, should slow production growth.

In its monthly Drilling Productivity Report released earlier in April, the U.S. Energy Information Administration suggested production in U.S. shale basis was set to modestly decline in May.

However, Bouchard stressed the importance of a rapidly growing inventory of uncompleted…

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Financial Post

OTTAWA — The dive in oil prices last year means the budget that Canadian Finance Minister Joe Oliver delivers on Tuesday will contain fewer big treats for voters in October’s election than the Conservative government had hoped.

[np_storybar title=”Finance Minister Joe Oliver has it right” link=”http://business.financialpost.com/fp-comment/terence-corcoran-finance-minister-joe-oliver-has-it-right”]
Terence Corcoran: Oliver appears to be sending a signal that now is not the time to begin fresh operating deficits to stimulate the economy. The future is unpredictable, but so far Oliver has it right. Read on
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When Oliver releases a fiscal plan at about 4 p.m. Ottawa time that will end a seven-year run of deficits just in time for October elections, as the governing Conservatives prepare to run on their reputation as fiscally responsible tax-cutters.

The Conservatives, seeking a rare fourth consecutive election win, had initially forecast a $6.4 billion budget surplus for the 2015-16 fiscal year and made no secret…

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Financial Post

Canadian oil and gas companies have been quick to initiate short-term fixes to withstand the downturn, but haven’t spent much time focusing on long-term strategy to sustain their business in an era of low oil prices, according to a new survey.

[np_storybar title=”Calgary’s C-suite feels the heat in oilpatch downturn: ‘We will see a bit of house-cleaning’” link=”http://business.financialpost.com/news/energy/calgarys-executive-suite-feels-the-heat-in-oilpatch-downturn-we-will-see-a-bit-of-house-cleaning”]

A handful of executives in Calgary’s downtown towers have been casualties of the severe oilpatch downturn, but current corner-office occupants should be able to keep their jobs – for now
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Nine out of 10 Canadian oil and gas companies surveyed by management consultancy Ernst & Young reported having either minimal or no long-term strategic cost management strategies in place to counter the current unfavourable economic conditions.

Like their global counterparts, Canadian oil and gas companies reacted swiftly to a 50% drop in prices since September by reining in capital costs, cutting…

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