Layoffs in the Oil Patch 3

[RichieRich]

Originally Posted by Locke

What are Environmental Groups doing to get to Net Zero emissions?
Shall we inspect the Furnaces in their offices?

How dare you!!
Yeah, they jetset around (along with select Hollywood stars) and make noise about ESG meanwhile USA and in particular California are some of the worst.

With respect to Russia and China emissions... you think they actually really care? They've already called Canada fools for stifling our own economy and natural reserves.

[burn_this_city]

WCS is now trading just below $50 in Edmonton. Last time prices were this high it was a couple months in 2018/2019 when WTI was mid 60s, before that you were looking at 2014/15 for the last time it was this high. Hearing about a few different companies dusting off projects again, hopefully that translates to job postings showing up over the next few months.

[InglewoodFan]

Things might be starting to warm up a bit in EPC world too, I've done more BD & proposal work so far in Q1 than all of Q3/4 last year. I'd really like to get some folks back to work so hopefully some of these projects get some momentum.

[TSXCman]

Originally Posted by InglewoodFan

Things might be starting to warm up a bit in EPC world too, I've done more BD & proposal work so far in Q1 than all of Q3/4 last year. I'd really like to get some folks back to work so hopefully some of these projects get some momentum.

That's awesome to hear! I'm coming up on 4 months unemployed, but my start was in EPC then moved over to an owner/operator.



Better open the Rolodex up and start reconnecting.

[Lubicon]

Another merger announced yesterday in the Montney play. Spartan Delta purchasing Inception.

[Nufy]

Is there a ballpark conversion for switching from contract back to a regular employee ?

Rate per hour to salary etc...

Just curious.

[InglewoodFan]

Originally Posted by Nufy

Is there a ballpark conversion for switching from contract back to a regular employee ?

Rate per hour to salary etc...

Just curious.

Ballpark for me would be ~15% - but - you should do a calculation based on the whole package being offered. I have a spreadsheet that I account for stats/vacation/sick that I don't have as a contractor, extended health benefits and insurance, CPP, overheads, WCB. And utilization.

Given how low my utilization has been over the last year, I would take an even bigger haircut for a bit of job security. YMMV

[Hessen]

FWIW 26% reduction was the percentage used at my company 5 years ago.

[Lubicon]

M&A activity is really heating up. Now Shell has sold their Kaybob Duvernay assets to Crescent Point for $900 million. Shell has already downsized in Canada so not sure how many jobs this will take with it.

[red sky]

Ovintiv announced they sold their Duvernay assets as well today. No buyer was named.

[RichieRich]

Originally Posted by Nufy

Is there a ballpark conversion for switching from contract back to a regular employee ?
Rate per hour to salary etc...
Just curious.

Ballpark'ish'ish... or at the very least some perspective in the link below. The key is to very the entire article and not just stop at the top calculation and go "oooooh".

Contractor costs may include technology (computer, phone, etc), home office, benefits/health/insurance, accounting, taxes, etc, incorporation costs, errors and omissions insurance, other liability etc...

https://www.toptal.com/freelance/don...nd-consultants

I also have a spreadsheet I've slowly built up to compare staff vs contract role. The following are my line-items for "equalizing" offers:
Hourly Rate; Base Salary; Overtime; Bonus; Pension; RRSP; Benefits / HCSA; CPP EI; LTI; Contractor Costs; Vacation - in base?; Stats - in base?; Flex - in base?

Total Comp = ??
$/working day

Effective $/hr

Base hourly

[Hack&Lube]

Originally Posted by burn_this_city

WCS is now trading just below $50 in Edmonton. Last time prices were this high it was a couple months in 2018/2019 when WTI was mid 60s, before that you were looking at 2014/15 for the last time it was this high. Hearing about a few different companies dusting off projects again, hopefully that translates to job postings showing up over the next few months.

What are the reasons behind the current WCS high? Is it sustainable for a little while?

[burn_this_city]

Originally Posted by Hack&Lube

What are the reasons behind the current WCS high? Is it sustainable for a little while?

WTI and Brent are over $60 because inventories are dropping and OPEC+ is maintaining large cuts while demand recovers.

The other aspect is more medium/long term, the market is starting to believe there is a supply shortage coming in 2-3 years. Covid killed shale's ability to grow their production beyond their peak for at least a few years. With their low rig count they will struggle to outrun the decline treadmill and many were struggling to generate returns before the virus smoked them.

Venezuela and Mexican heavy oil is what we generally compete against in the US gulf, one is a failed state and Mexico is forecasting 60%+ declines in their exports over the next few years.

Canada has managed to mostly sort out the takeaway capacity. Between pipe and rail and shut in production we can move every barrel at the moment. The differential is around $10 because you can sell a barrel of WCS in Houston for $3 less than WTI. It only costs about $7-10 to ship it down there by pipe.

Even gas producers here are having their moment in the sun. Gas has gone nuts in the States since the Texas storm and natural gas was selling for $1,250/mmbtu in Oklahoma today. Anyone with an ability to ship into the southern US is making a killing.

[burn_this_city]

Forgot to add, most banks are forecasting oil to keep going up with all the stimulus money floating around driving demand higher in 2022 and beyond.

[DiracSpike]

We've all been waiting a long time for shale to finally calm the #### down and it looks like that's started to happen. OPEC+ will probably announce next week that some production will be coming online due to pressure from some members (russia and iraq) and major customers (india) to pump more but that's not necessarily bad news. While it would place a lid on the rally for now it represents some incremental exhaustion of OPEC spare capacity with demand hopefully running far out in front. That sets up really well as the decade moves forward. Overall it's been a pretty positive headline week, you know its been good if people are even positive about freaking natural gas for once. With coastal gas link, line 3, and tmx on schedule to come online all within two years and a massive thirst for energy in the developing world I'm pretty positive that Alberta will have a better upcoming decade than the last one. It wouldn't be that hard to do, but still.

[JD]

When I started my career in the 00's, gas was king in Alberta. Shallow gas wells in the prairies being drilled by the hundreds. The older guys in the office would raise a glass every time a cold snap hit the US because it meant higher prices, more rigs. Seems like it's been a long time since that and we've been focused on heavy oil for a while, but if gas could come back, it would be big for Alberta.

[Hack&Lube]

Originally Posted by DiracSpike

We've all been waiting a long time for shale to finally calm the #### down and it looks like that's started to happen. OPEC+ will probably announce next week that some production will be coming online due to pressure from some members (russia and iraq) and major customers (india) to pump more but that's not necessarily bad news. While it would place a lid on the rally for now it represents some incremental exhaustion of OPEC spare capacity with demand hopefully running far out in front. That sets up really well as the decade moves forward. Overall it's been a pretty positive headline week, you know its been good if people are even positive about freaking natural gas for once. With coastal gas link, line 3, and tmx on schedule to come online all within two years and a massive thirst for energy in the developing world I'm pretty positive that Alberta will have a better upcoming decade than the last one. It wouldn't be that hard to do, but still.

Some grounded optimism is good to hear. I had my major layoff from the oilpatch in 2016 and I have since moved on from the industry but it's Calgary so my current industry and so many others livelihoods are still tied to the success of O&G and the health of the provincial economy in general.

[bizaro86]

Originally Posted by JD

When I started my career in the 00's, gas was king in Alberta. Shallow gas wells in the prairies being drilled by the hundreds. The older guys in the office would raise a glass every time a cold snap hit the US because it meant higher prices, more rigs. Seems like it's been a long time since that and we've been focused on heavy oil for a while, but if gas could come back, it would be big for Alberta.

I wonder what sustained gas price it would take to fire up the old shallow gas machine. Lots of fields with spare compression/treatment capacity, so in most cases the only Capex required would be drilling/completion. Even tie ins would mostly be short.

[DiracSpike]

This predated my career as well, and it's tough for anyone to remember now since gas has been comatose for almost 13 years now, but gas did really run show here. For all the fights over oil sands, mining super projects, and oil pipelines NG is the sleeping giant in the basin that probably has a much brighter long term future than oil. With the supplanting of coal by gas in the power generation market and the worldwide trade of LNG we could see it take back the title. I don't know much about shallow gas but i listen to most of the major conference calls of major companies in town and I've heard them hype the Montney many times, a lot of them calling it a world class asset and a crown jewel. All the biggest natural gas companies now got there from drilling montney. The chairman of CNRL even said one time that if the Montney was in the US it would be getting drilled to bits and would be the premier unconventional gas basin, even more than their main basins that have allowed their production to explode. The only reason there isn't a frenzy of activity there is because in Canada we're too cool to build pipelines to allow for production growth.

[Suave]

Originally Posted by bizaro86

I wonder what sustained gas price it would take to fire up the old shallow gas machine. Lots of fields with spare compression/treatment capacity, so in most cases the only Capex required would be drilling/completion. Even tie ins would mostly be short.

I think last time time I asked our production guys we would be looking at $6 for it to be economical. For Alberta I would much rather have a run of higher gas prices then oil. It would be a bigger employment driver and spread the work around throughout the province.