Official (Alberta) Oil Discussion Thread

[shermanator]

This thread seems like the right place to put this:

[cam_wmh]

nm

[The Fonz]

Originally Posted by Red

And besides, who left and where did they go? It's not like oil is everywhere...

Maybe not everywhere, but by no means is Alberta the 'Oil Baron' of the world. There is a massive glut of oil outside of Alberta's borders, and these big oil companies have endless investment opportunities outside of Alberta.

As for who has left, I don't really follow as I don't work in O&G, nor do I live in Alberta, but I do remember seeing this, regarding Crescent Point:

May 7, 2015:
http://calgaryherald.com/storyline/c...utput-is-up-18

“On the budgeting side, on the capital program, we have less than 3% of our $1.45 billion in Alberta and we have the flexibility, obviously, with that small of dollars, to shift that money into Saskatchewan and we are reviewing that dependent on Alberta announcements of a royalty review.”

And now this a week ago:

Jan 7, 2016:
http://calgaryherald.com/business/en...if-prices-fall

About two-thirds of its budget will be spent in southeast Saskatchewan. It also has operations in Manitoba, Alberta, Utah and North Dakota.

[Bend it like Bourgeois]

Originally Posted by Frequitude

What needs an overhaul is the royalty system for conventional oil and gas. I don't know it that well, but it's a complicated mess where your royalties depend on all sorts of things like quality, rates, types of wells and so on.

To be honest, I'm not scared much at all about what will be announced. I can't imagine they're going to actively kill anything. What sucks though is that it's taken this long to announce. Uncertainty keeps a non-zero amount of capital on the sidelines.

People I've talked have said the same - the delay has cost in not pulling one of the few levers we have to actually help, in fixing the conventional royalty structures.

The capital on the sidelines issue to me is as more about the recovery than the current activity. There will need to be M&A, lots of investment in lowering costs, and some pretty significant decisions about what, if anything, some companies can do to operate in the 'new normal'. Little of that happens when business is uncertain - bordering on paranoid. Its not a question of will it be a or b. Lots of companies arent sure if it will be a or z.

[oilyfan]

Originally Posted by The Fonz

Maybe not everywhere, but by no means is Alberta the 'Oil Baron' of the world. There is a massive glut of oil outside of Alberta's borders, and these big oil companies have endless investment opportunities outside of Alberta.

As for who has left, I don't really follow as I don't work in O&G, nor do I live in Alberta, but I do remember seeing this, regarding Crescent Point:

May 7, 2015:
http://calgaryherald.com/storyline/c...utput-is-up-18

“On the budgeting side, on the capital program, we have less than 3% of our $1.45 billion in Alberta and we have the flexibility, obviously, with that small of dollars, to shift that money into Saskatchewan and we are reviewing that dependent on Alberta announcements of a royalty review.”

And now this a week ago:

Jan 7, 2016:
http://calgaryherald.com/business/en...if-prices-fall

About two-thirds of its budget will be spent in southeast Saskatchewan. It also has operations in Manitoba, Alberta, Utah and North Dakota.

Hasn't Crescent Point always been Saskatchewan centered?

[Suave]

Originally Posted by oilyfan

Hasn't Crescent Point always been Saskatchewan centered?

Yes, in 2014 Alberta only accounted for 10% of their total drills, Sask had 67%.

[firebug]

Originally Posted by Regorium

This is really interesting to me. You made a silly statement. Then you project what you reading from crazies on FB to the very reasonable statements made in this thread, and call us ignorant, stupid and getting our feathers ruffled. Nobody has said a single thing about ruining Alberta. In fact, several posts clarified your question, and then responded directly to it.

Have you ever considered that you are exactly like the people you claim to hate, except on the left-wing side?

Here's a super reasonable post that you seem to have conveniently ignored:



Go ahead.

PS. Your very post in this thread responded to someone that called the NDP's policies "economically irresponsible". The first person that used "ruin Alberta" was you.

Lets put these taxes into perspective: [EDIT: Okay pasting this table didn't work, but you can see it here]

Dates General
Corporate
Tax
Rate Small
Business
Rate Small
Business
Deduction
(SBD) Manufacturing
and
Processing
(M&P) * Annual Business
Limit (ABL) /
Small Business
Threshold Threshold as a
Multiple of
Base Amount
of $200,000 January 1, 2000 to March 31, 2001

15.5%

6%

9.5%

1%

$200,000

100%

April 1, 2001 to March 31, 2002

13.5%

5%

8.5%

n/a

$300,000

150%

April 1, 2002 to March 31, 2003

13%

4.5%

8.5%

n/a

$350,000

175%

April 1, 2003 to March 31, 2004

12.5%

4%

8.5%

n/a

$400,000

200%

April 1, 2004 to March 31, 2006

11.5%

3%

8.5%

n/a

$400,000

200%

April 1, 2006 to March 31, 2007

10%

3%

7%

n/a

$400,000

200%

April 1, 2007 to March 31, 2008

10%

3%

7%

n/a

$430,000

215%

April 1, 2008 to March 31, 2009

10%

3%

7%

n/a

$460,000

230%

April 1, 2009 to June 30, 2015

10%

3%

7%

n/a

$500,000

250%

July 1, 2015 to current

12%

3%

9%

n/a

$500,000

250%

And again, as someone who has never voted NDP (nor liberal for that matter), the heat the NDP are getting for the current economic situation in the province is laughable.

I'm behind the scenes making the financial sausage for an intermediate producer here in AB and it aint the corporate tax rate change or the royalty review that is preventing us from plowing capital into the ground here. (Hint: It's the commodity prices)

Now maybe because of those changes, some day in the future the province will have less rig-pigs, geos or exploitation engineers, but we'll have more teachers, nurses and maybe some research scientists instead. Sounds like a decent trade in my books.

[Red]

Originally Posted by Regorium

This is really interesting to me. You made a silly statement. Then you project what you reading from crazies on FB to the very reasonable statements made in this thread, and call us ignorant, stupid and getting our feathers ruffled. Nobody has said a single thing about ruining Alberta. In fact, several posts clarified your question, and then responded directly to it.

Have you ever considered that you are exactly like the people you claim to hate, except on the left-wing side?

Here's a super reasonable post that you seem to have conveniently ignored:



Go ahead.

PS. Your very post in this thread responded to someone that called the NDP's policies "economically irresponsible". The first person that used "ruin Alberta" was you.

I didn't ignore it. I posted a link in response. The rest have been discussed in length before. I disagree, I hold a different opinion. A silly one at that according to you. And I am the ignorant one?

And sure, let's pick posts apart about who used the word X or Y. Like that makes a difference, it meant the same thing. What are we, 14 years old?

Back on topic....

[OMG!WTF!]

Originally Posted by firebug

Now maybe because of those changes, some day in the future the province will have less rig-pigs, geos or exploitation engineers, but we'll have more teachers, nurses and maybe some research scientists instead. Sounds like a decent trade in my books.

That is mind numbing logic.

[firebug]

Originally Posted by OMG!WTF!

That is mind numbing logic.

Sure is... until you need a nurse.

[Locke]

Originally Posted by firebug

And again, as someone who has never voted NDP (nor liberal for that matter), the heat the NDP are getting for the current economic situation in the province is laughable.

Now maybe because of those changes, some day in the future the province will have less rig-pigs, geos or exploitation engineers, but we'll have more teachers, nurses and maybe some research scientists instead. Sounds like a decent trade in my books.

Originally Posted by OMG!WTF!

That is mind numbing logic.

Originally Posted by firebug

Sure is... until you need a nurse.

No. What you're talking about is the complete lack of logic.

Nurses and teachers are all well and good. But someone has to pay them and the money to pay them has to come from somewhere.

Public services are secondary services. They are paid for via tax revenue from industry and the population. Take that away and they cant survive. They are not revenue generating services they are dependent upon revenue generating industries.

They can not stand alone.

NDP apologists must think economics is just magic. Do you know how magnets work? Or is that a total mystery too?

[VladtheImpaler]

Originally Posted by firebug

Sure is... until you need a nurse.

Or a research scientist?

[VladtheImpaler]

Originally Posted by Locke

No. What you're talking about is the complete lack of logic.

Nurses and teachers are all well and good. But someone has to pay them and the money to pay them has to come from somewhere.

Public services are secondary services. They are paid for via tax revenue from industry and the population. Take that away and they cant survive. They are not revenue generating services they are dependent upon revenue generating industries.

They can not stand alone.

NDP apologists must think economics is just magic. Do you know how magnets work? Or is that a total mystery too?

Pray tell, what is this magical beast?

[Locke]

Originally Posted by VladtheImpaler

Pray tell, what is this magical beast?

I'm beginning to understand how the NDP got elected in this province.

More nurses and teachers is the answer!

[Kjesse]

Less rig-pigs, geologists or exploitation engineers means, that for the teachers and nurses, there will either be fewer of them, or they will be paid less, unless some other industry expands to pick up the lost tax revenue from those dastardly oil and gas folk.

[Locke]

Originally Posted by Delgar

Less rig-pigs, geologists or exploitation engineers means, that for the teachers and nurses, there will either be fewer of them, or they will be paid less, unless some other industry expands to pick up the lost tax revenue from those dastardly oil and gas folk.

No way man, the oil guys are filthy swine, the lot of them. More teachers and nurses! We should be a province comprised exclusively of schools and hospitals!

[peter12]

Don't people understand what productivity is?

[Frequitude]

Originally Posted by Red

I didn't ignore it. I posted a link in response. The rest have been discussed in length before. I disagree, I hold a different opinion. A silly one at that according to you. And I am the ignorant one?

And sure, let's pick posts apart about who used the word X or Y. Like that makes a difference, it meant the same thing. What are we, 14 years old?

Back on topic....

You did not answer the question. You posted a link to an article saying Notley supports TMX in an effort to discredit the "campaigning against pipelines" part of my question in hopes of discreditting the higher level business and finance rootings of the question. You knew exactly what you were doing. I am assuming you know that Notley opposes KXL and Gateway which makes that part of the question valid. Must I really provide links to that?

Again, I welcome you to make a logical arguement against the following statement. Try to do it without using the words NDP or Notley so as to keep it rooted in finance and economic theory as the question is posed instead of politics.

Originally Posted by Frequitude

Higher corporate taxes, higher carbon taxes, royalty framework uncertainty, and campaigning against pipelines all have directionally negative consequences on the oil and gas industry in Alberta.

[Izzle]

Originally Posted by Locke

No. What you're talking about is the complete lack of logic.

Nurses and teachers are all well and good. But someone has to pay them and the money to pay them has to come from somewhere.

Public services are secondary services. They are paid for via tax revenue from industry and the population. Take that away and they cant survive. They are not revenue generating services they are dependent upon revenue generating industries.

They can not stand alone.

NDP apologists must think economics is just magic. Do you know how magnets work? Or is that a total mystery too?

Should nurses and teachers become 'privatized'? Then they can be revenue generating.

[CaptainCrunch]

Originally Posted by firebug

Now maybe because of those changes, some day in the future the province will have less rig-pigs, geos or exploitation engineers, but we'll have more teachers, nurses and maybe some research scientists instead. Sounds like a decent trade in my books.

Unless those teachers and nurses and research scientists are selling amway on the side or drilling oil on the side, your model makes no sense.

When you pay those people from the public tax pool they become revenue negative, you pay them a lot more then you receive back in taxation.

They're net losses.

Of course, I'm not saying eliminate them, (However I would argue that if you cut 25% of non front line government workers and non essential services, that you would see little to no disruption in services becaues of over staffing and inefficiencies).

For every nurse that makes lets say 75,000 (I'm just guessing here) you have to find that amount in tax revenues to pay them, or probably 5 or 6 well paid people.

So trading off the people that form the positive tax base with people that form the negative tax base makes no sense.

If you want to increase government services you need to increase the amount of people in that positive position over people that take more then they give dollar wise.

You're argument is shy the federation in Star Trek would fail.