Official (Alberta) Oil Discussion Thread

[peter12]

How much of a bath did genius investor Schulich take on this?

[burn_this_city]

Couple hundred million loss. I was surprised he invested, they didn't have enough production to achieve critical mass. I think you need close to 100kbpd to make a go as a SAGD operator.

[bizaro86]

Originally Posted by burn_this_city

Couple hundred million loss. I was surprised he invested, they didn't have enough production to achieve critical mass. I think you need close to 100kbpd to make a go as a SAGD operator.

I don't agree with that. The company that bought them (Cona) has a bunch of little SAGD assets in Saskatchewan. The way lower SORs of these assets (and Lindberg is comparably very low) make them easier to operate at a lesser scale.

Pengrowth had some good assets. If they would have raised equity 3-4 years ago when their shares were higher to pay of debt I think they'd be fine right now.

[CaptainCrunch]

https://bc.ctvnews.ca/first-nation-e...ling-1.4671322

[burn_this_city]

Originally Posted by bizaro86

I don't agree with that. The company that bought them (Cona) has a bunch of little SAGD assets in Saskatchewan. The way lower SORs of these assets (and Lindberg is comparably very low) make them easier to operate at a lesser scale.

Pengrowth had some good assets. If they would have raised equity 3-4 years ago when their shares were higher to pay of debt I think they'd be fine right now.

Sask has different rules around water treatment ect that drive up the cost here in Alberta. All the smaller AB based SAGD operators have gone belly up, Connacher, Pengrowth, Sunshine. Athabasca is circling the drain. Who knows if Cona, JACOS or OSUM are actually making money, they are either private or buried in a parent with deep pockets.

[bizaro86]

Originally Posted by burn_this_city

Sask has different rules around water treatment ect that drive up the cost here in Alberta. All the smaller AB based SAGD operators have gone belly up, Connacher, Pengrowth, Sunshine. Athabasca is circling the drain. Who knows if Cona, JACOS or OSUM are actually making money, they are either private or buried in a parent with deep pockets.

That's a fair point. Water treatment definitely has huge scale benefits. I've worked on development of SAGD projects on both sides of the border, and as a citizen I think the AB water rules are better. Use that much water and it is responsible to recycle it.

I still think at a low enough SOR something Lindberg size works nicely. Connacher had huge reservoir problems and had a huge SOR - they never really got conformance. Even Athabasca SOR is much higher than Lindberg iirc.

[Azure]

I still maintain that Alberta & Canada has what you can call a moral responsibility to export our oil & gas to the rest of the world to help mitigate climate change.

It is nice to see some higher ups in the industry jumping on that train. We haven't done a very good job selling it that part of the equation.

[CaptainCrunch]

Originally Posted by Azure

I still maintain that Alberta & Canada has what you can call a moral responsibility to export our oil & gas to the rest of the world to help mitigate climate change.

It is nice to see some higher ups in the industry jumping on that train. We haven't done a very good job selling it that part of the equation.

Agreed, when you look at the countries that are taking our market share, Saudi Arabia, Venezuela, The United States, they have little give a crap in how they extract resources, and they're incredibly dirty in how they do it. California's oil fields are absolutely filthy.


Canada exporting their oil and using the money on technology investment just seems like a smart thing and something that Canada should get behind. Plus the money from that goes into Canadian Pockets instead of terrible regimes.


I've yet to see these groups go and protest in these other countries in the way that they do up here. Maybe they're misguided.

[edslunch]

Originally Posted by Azure

I still maintain that Alberta & Canada has what you can call a moral responsibility to export our oil & gas to the rest of the world to help mitigate climate change.

It is nice to see some higher ups in the industry jumping on that train. We haven't done a very good job selling it that part of the equation.

Gas yes, oil maybe not. Despite advances the oil sands have higher emissions intensity than most other sources. I haven’t been able to find any data to the contrary.

Trouble is, a close look at the leading comparisons of the world’s crude oil sources, assembled by governments, academics and private-sector analysts, shows that, overall, producing a barrel of crude from oil sands still emits more greenhouse gas than the average of all sources. The best or newest oil sands developments, whose emissions are below the mean, remain exceptions. “You have a lot of amazing trees here. But it is not the forest,” says Benjamin Israel, senior analyst at the Pembina Institute, a clean energy think tank.

https://www.macleans.ca/economy/scru...-sands-record/

[SeeGeeWhy]

The commentary about the marginal reservoirs that smaller thermal operators face is telling. We might have an assload of resource, but it’s in poor reservoir, requires lot of energy to extract, and is a low quality product. These are physical realities that will make attracting new investment into these plays a major challenge, even if we had zero tax and unencumbered market access. Low EROI energy sources will always need to be subsidized by higher EROI energy sources if they are going to continue to be utilized. These don’t make good investments, by and large.

[CaptainCrunch]

https://twitter.com/user/status/1115626690275938304

[CaptainCrunch]

https://www.cbc.ca/news/business/hou...ells-1.5348828

Another Alberta oil and gas company has closed its doors, leaving more than $80 million in estimated costs to clean up its remaining wells, pipelines and facilities.


Calgary-based Houston Oil & Gas told the Alberta Energy Regulator (AER) last month that it was ceasing operations and no longer has any employees, according to court documents. Houston entered receivership last week.

[peter12]

I remember writing a paper with Preston Manning on ghost wells and associated clean-up costs years and years ago. Albertans knew this could potentially be a problem but we ignored it because creating a clean-up fund was deemed too expensive.

[Ashasx]

Huh? The Orphan Well Fund exists.

[Wormius]

Originally Posted by Ashasx

Huh? The Orphan Well Fund exists.

I don't think it's nearly sufficient to cover the costs of everything out there, or to fully remediate the sites vs a just "good enough" clean-up.

[nik-]

Originally Posted by Wormius

I don't think it's nearly sufficient to cover the costs of everything out there, or to fully remediate the sites vs a just "good enough" clean-up.

What brings you to this conclusion? Just a guess?

[peter12]

Originally Posted by Ashasx

Huh? The Orphan Well Fund exists.

Yeah, but it's not large enough.

[Weitz]

Originally Posted by peter12

Yeah, but it's not large enough.

Do you even know how it works?

[peter12]

Originally Posted by Weitz

Do you even know how it works?

Enlighten me, please.

[Weitz]

Originally Posted by peter12

Enlighten me, please.

Well first of all its called the Orphan Well Association - not fund. And they don't hold money (or at least like a fund would) year over year.