Quote:
Originally Posted by GGG
It won't change future rig costs and it doesn't really free up cash as if they were paying not to drill it means the economics would be pretty bad on the wells that were originally planned to be drilled
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Not necessarily true I would argue. I would expect that day rates today are much lower than when these contracts were signed so you could drill today for less than you could last year or two years ago. If rig rates aren't going down then the industry will fail in their goals of reducing cost. All other services have taken a hit on rates, I have to think drillers have too.
A lot of discussion has focused on the oil sands and rightfully so but there is also the conventional industry in Canada. I don't think costs have come down enough yet but we do stand a decent chance of competing with shale oil (we produce it too) if we can achieve this. There may be a glimmer of hope for that side of the industry.