Originally posted by davidI
Do you seriously think the CEO's of top oil companies get together at the Petroleum Club over a few bottles of 40 year old scotch and decide that they'll all cut their capital budgets to lower service company prices? Get real!! The slowdown actually has quite a bit to do with the royalties because when reservoir engineers look at the economics of a well they definitely include royalties costs. No economics, no well. I do agree that the drop in NG prices and Income Trust rules have also had a great impact, but that's not the reason companies are allocating their capital budgets to BC, Sask & overseas.
Yes I seriously do. Maybe you should get real. The slow down started in late Q4 2006 and was full on in Q1 2007. This had NOTHING to do with the royalty report which was not made public until the summer. It had everything to do with the price of Nat Gas dropping 50%, all of the income trusts going bust over night in November of 2006, and the collusion between the operators (i think the petroleum club is closed now isnt it?)
Hate to break it to you but Alberta isn't the only place in the world with NG. I think the price will stick between $8-11. The gas storage levels are still extremely high and several large LNG projects will be completed over the next few years.
There is trillions of CF of NG in the shale in BC. Right around Dawson Creek, which is right by Grande Prairie, right next to one of the largest in situ oil projects in the world in Peace River.
11 dollars for gas is almost 14 when things were going insane. The royalty scheme is going to be adjusted, they have already announced after the huge backlash (constructive feedback) they received from the operators that some wells would be reconsidered.
The companies are based in Alberta, yes. The rig hands and service companies that will be drilling these wells are not. The drill pipe, compressors, and other consumables will come from closer to the project.
So which drilling contractor do you know that operates out of BC or Sask?? Dont be silly. Everything comes from Nisku. All of the service companies have huge bases and supplies in Alberta, there is not much in BC or Sask unless you want to count the little fenced yards that are in FSJ or FN or LLOYD which are still owned by the service companies that are based in AB. Most of the rig hands are from Alberta (and im talking about the rigs that are working in BC and SASK right now). The other half of the rig hands are from NFLD. I can count the number of BC boys i met on the rig in three years on two hands.
anyhoo I like constructive talk lets keep the information coming
TRUTH: it's the new hate speech.
In a time of universal deceit - telling the truth is a revolutionary act. - Orwell