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Old 05-23-2020, 11:16 AM   #41
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It was interesting for me when I was in my two prior roles, a ERP consulting and implementation firm, and a HCM solution firm how much things had changed in a pretty short period of time.


For the SMB base having dedicated servers on your own on site, or even off site started fading and it made sense as companies wanted to change cost centters to expense center. Also the role of the internal IT support really started to fade in exchange for a more strategic role.


The biggest shocker to me was the moving of ERP and key financial and information centers to hosted cloud solutions, which really removed the need for dedicated server people who focused on keeping things up to date, and doing backup and disaster recovery and break fix. Companies were bound and determined to exchange that person for someone more strategic. It was the same in the collaboration space, having your own web servers or email solutions on site pretty much vanished.


Even the standard IT consulting firms that would come in and say "We'll look after your IT needs for a hourly or block rate were starting to become a really dated business model.



For an ERP for example it makes more sense to pay lets say $20,000 per year for a hosted solution placed on AWS where the ERP company takes care of all of the backups and disaster recovery and guarantees up time. If you wanted customization you could either use a consulting individual who could run customization or report creation, or use the ERP company itself (IE Deltek, Accumatica).


As opposed to the formerly accepted model of buying the software for 80k or so, buying a server to put on site and having a technical IT person there to manage the server and keep it up to date and deal with down time, that you pay a annual salary to.


One of the companies that I'm talking to deals specifically with data storage and security, and your basically buying space for your data and access. The nice thing about it, is its elastic so if your company goes through down times, you can adjust your licensing to reflect that and reduce costs that way.


I think that in house does have a place in terms of development if your on a large enough scale to need that or your development is part of your product offering, but the day of having server wiz kids or breakfix brains is in its sun set.



I do agree and disagree with one part of the discussion or not, and that's the strategic value of IT strategies. I believe and its the same thing with HR, that those departments that are viewed as necessary but evil cost centers/vacuums with no revenue potential are not given a seat at the table in terms of organization strategy. I think that a company that does not view those departments as extremely strategic to the bottom line of their company are dumb. If anything an IT strategy that can convert cost to expense and find ways to off load traditional IT strategies are further ahead. Its the same with HR, if you can match culture and hiring practices to revenue and ROI your company is enlightened and efficient.
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Old 05-23-2020, 12:10 PM   #42
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Meh, oil is dead anyways. McKenna has tweeted that any displaced workers can easily transition into the green energy sector with a week of training.

We will be shipping money to Quebec again very very soon.

End sarcasm.

This liberal regime has got to be the worst government ever. Bunch of amateurs so bent on a single goal of destroying good jobs and wealth while making Canada weaker. Unbelievable. Makes me sick when morneau is asked financial questions and all he offers up is a word salad. Clearly meant as as a distraction play while they seemingly set up for the next election.
Always puzzling how the free market crowd somehow thinks government intervention is okay when market forces are adverse. When times are good its all about red tape reduction and keep royalties low. When times are bad its where’s my bailout. To think this market predicament is the fault of the federal government is silly
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Old 05-23-2020, 12:50 PM   #43
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Except this isn't normal times, and the government's current spending and propping up of businesses proves that.

Prior to Covid I don't think anyone was calling for Federal help for the Oil Patch, instead they were asking for noxious poison pen legislation like 48 and 69 to be changed and adjusted.

The Covid pandemic means that the real rules of "capitalism no longer apply". On top of that with the amount of tax revenue that has been supplied to the government by the Oil Patch should literally mean that when times are unusual so to speak like this that the government should provide a safety net. I mean Trudeau was prepared to break the law to preserve jobs in Quebec. During this Crisis he was willing to give over a half billion to the Arts and support businesses that he likes.

His 1.8 billion for well clean up is nice but insufficient and did nothing for companies in terms of capitalization and survival assistance. Even after he and his incompetent Finance Minister sat there weeks ago and said support and help was coming in days and weeks.

Right now, the Government by ducking dodging diving and ducking on that commitment and creating even more uncertainty and investment bleed in Canada is literally cutting off his nose to spite his face as he's going to see a pretty massive reduction in tax revenue from a personal and corporate perspective while seeing a massive increase in the costs of UI and CERB.

Again, these are not usual times, so what your saying doesn't have relevance.
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Old 05-23-2020, 12:58 PM   #44
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I don’t really think the government should be throwing additional money at oil companies outside of what all other industries are getting in terms of salary support.

Where I think the government could help is to buy debt as it comes up for renewal in exchange for shares of the company. If a company fails on cash flow then it may not make sense throwing good money after it. If it is failing because of an inability to renew debt Because of current prices then getting it through that point would be helpful.

WCS is $30 US today. If you aren’t cash flow positive at this point you are in real trouble long term.
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Old 05-23-2020, 01:00 PM   #45
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I don’t really think the government should be throwing additional money at oil companies outside of what all other industries are getting in terms of salary support.

Where I think the government could help is to buy debt as it comes up for renewal in exchange for shares of the company. If a company fails on cash flow then it may not make sense throwing good money after it. If it is failing because of an inability to renew debt Because of current prices then getting it through that point would be helpful.

WCS is $30 US today. If you aren’t cash flow positive at this point you are in real trouble long term.

Except the Government is providing direct funding to fisheries and farming sectors that are outside of the supports that you're talking about for example. I also think that the government provided over half a billion to arts as well..
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Old 05-23-2020, 01:03 PM   #46
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I'm not sure how long it'll take, but it's inevitable that the opinion on oil and gas change in this country. It's too big an industry and too important to the government coffers not to.
The question becomes, how long can people and governments last until they realize they need the money generated from it to fund things like retirement, health care, and all the other social services that so many people rely on?
Quebec and so many people across this country, are like a 30 year old living in his parents basement, relying on hand outs from his parents, all while condemning them for how they make their money.
Well, if you get your parents fired, it's only a matter of time until the money dries up.
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Old 05-23-2020, 01:05 PM   #47
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Except the Government is providing direct funding to fisheries and farming sectors that are outside of the supports that you're talking about for example.
And they did the same for the orphan wells program. 250 million for farming when they asked for 2.6 billion

My read of the fishing subsidies is that bulk of it is targeted at those who weren’t eligible CERB funding. It’s sounds like only 60 million going to processing plants.
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Old 05-23-2020, 01:18 PM   #48
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And they did the same for the orphan wells program. 250 million for farming when they asked for 2.6 billion

My read of the fishing subsidies is that bulk of it is targeted at those who weren’t eligible CERB funding. It’s sounds like only 60 million going to processing plants.
The orphan well program is nice but really doesn't nothing long term to help the industry recovery and the jobs created are temporary at best.

The farming help was absolutely underwhelming, and we're going to pay for that down the road. Just like this country is going to pay for its tepid support of Oil and Gas.
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Old 05-23-2020, 02:24 PM   #49
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I feel the most important number hasn't been addressed:


How much money does the O&G sector need and for how long?
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Old 05-23-2020, 02:29 PM   #50
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Its been said many times. You want to know what ails the oil industry here look no further than the Klein regime mid 1990s to 2005ish. Policy that encouraged a boom in the oil sands which temporarily made it look economic long term. Its simply not. Thats why there are piles of approved but unbuilt projects. We are now living thru the aftermath watching companies scale down and or leave the house party. It worked magic for Klein’s cronies. Its been an albatross since redford onwards. Not going to change with more federal money.

Alberta is left with a bloated population an infrastructure deficit insufficient public money to support health education and municipal costs etc....

The next political hero in Alberta will be the person who can solve this mess.
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Old 05-23-2020, 05:26 PM   #51
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I don’t really think the government should be throwing additional money at oil companies outside of what all other industries are getting in terms of salary support.

Where I think the government could help is to buy debt as it comes up for renewal in exchange for shares of the company. If a company fails on cash flow then it may not make sense throwing good money after it. If it is failing because of an inability to renew debt Because of current prices then getting it through that point would be helpful.

WCS is $30 US today. If you aren’t cash flow positive at this point you are in real trouble long term.


And if you are not, formula to be cash flow positive is

layoffs + other opex/capex cuts + shutting in high lifting cost wells.

Maybe instead of throwing money at the oil companies, throw money at everyone who is getting layed off and losing contracts. or fund some other programs to give them work.

Im not sure I fully support bailouts as the layoffs will still happen and the oil companies will just pocket it or put it towards debt.

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Old 05-23-2020, 06:04 PM   #52
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[/B]

And if you are not, formula to be cash flow positive is

layoffs + other opex/capex cuts + shutting in high lifting cost wells.

Maybe instead of throwing money at the oil companies, throw money at everyone who is getting layed off and losing contracts. or fund some other programs to give them work.

Im not sure I fully support bailouts as the layoffs will still happen and the oil companies will just pocket it or put it towards debt.
Well yah that’s why they rolled out the site rehabilitation program. The hope to actually put some people to work for a little while. With also cleaning up some sites in the process.

I don’t think you will ever see bailouts because of what you suggest we know will happen. Then government knows as well.
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Old 05-23-2020, 06:10 PM   #53
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Always puzzling how the free market crowd somehow thinks government intervention is okay when market forces are adverse. When times are good its all about red tape reduction and keep royalties low. When times are bad its where’s my bailout. To think this market predicament is the fault of the federal government is silly
The current O&G Marketplace is more of mess than a homemade radio.

To me the government should be doing everything they can to enable the marketplace. They had a private company ready to build a pipeline, they dragged thier feet for so long, they wound up buying the project. That should not happen.

As mentioned, where would all levels of government be without the sweet tax revenue generated by O&G?
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Old 05-23-2020, 06:23 PM   #54
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[/B]

And if you are not, formula to be cash flow positive is

layoffs + other opex/capex cuts + shutting in high lifting cost wells.

Maybe instead of throwing money at the oil companies, throw money at everyone who is getting layed off and losing contracts. or fund some other programs to give them work.

Im not sure I fully support bailouts as the layoffs will still happen and the oil companies will just pocket it or put it towards debt.

That'll probably completely kill any kind of investment in Alberta as its a sign that the Government isn't going to do anything to support the O/G + Energy sector. Its already impossible to get investment happening due to things like 48 and 69 and their poor response to Kinder and other reasons.


By basically saying your going to create what would be pretty much a welfare state you'll kill any inflow of money.
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Old 05-23-2020, 06:37 PM   #55
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That'll probably completely kill any kind of investment in Alberta as its a sign that the Government isn't going to do anything to support the O/G + Energy sector. Its already impossible to get investment happening due to things like 48 and 69 and their poor response to Kinder and other reasons.

By basically saying your going to create what would be pretty much a welfare state you'll kill any inflow of money.

So what is the ballpark of a dollar figure the industry needs? And to what end?
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Old 05-23-2020, 06:47 PM   #56
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Use emergency powers to push through energy east and create a grant program for those who wish to utilize our oil.

It's the only thing I think the government could do that would actually help long term.

Of course I don't believe they would ever do this.
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Old 05-23-2020, 06:57 PM   #57
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That'll probably completely kill any kind of investment in Alberta as its a sign that the Government isn't going to do anything to support the O/G + Energy sector. Its already impossible to get investment happening due to things like 48 and 69 and their poor response to Kinder and other reasons.


By basically saying your going to create what would be pretty much a welfare state you'll kill any inflow of money.
Giving money to O&G will get you pennies on the dollar for the investment that getting pipelines East and West will... but this government has proved completely inept at pushing that through. If the government is willing to set up other programs or help invest in other sectors... I say take what you can get and it would probably go farther than just handing out a million dollar cheque to every oil company.

Some tax relief would help and maybe thats a middle ground.

Its s tough situation. We are really painted in a corner right now.

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Old 05-23-2020, 07:58 PM   #58
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Its been said many times. You want to know what ails the oil industry here look no further than the Klein regime mid 1990s to 2005ish. Policy that encouraged a boom in the oil sands which temporarily made it look economic long term. Its simply not. Thats why there are piles of approved but unbuilt projects. We are now living thru the aftermath watching companies scale down and or leave the house party. It worked magic for Klein’s cronies. Its been an albatross since redford onwards. Not going to change with more federal money.

Alberta is left with a bloated population an infrastructure deficit insufficient public money to support health education and municipal costs etc....

The next political hero in Alberta will be the person who can solve this mess.
We're the 4th largest oil producer in the world. Companies may sell and leave or change names but we've gone from 10th in the early 90s to the 4th largest today. People laughed at Harper when he talked about us as energy superpower, but it's pretty clear we're a global player after climbing the ranks in the last 30 years.

Not sure how much better Alberta would be if the last 30 years of substantial economic growth didn't happen.

Like GGG said, if you aren't cashflow positive at $30USD WCS you probably shouldn't be in business. Only a minor fraction of production in this province isn't at least covering their costs at this level. With this narrow differential due to excess takeaway capacity at the moment, we're selling bitumen at prices only seen before at $45 WTI.
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Old 05-23-2020, 07:59 PM   #59
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So what is the ballpark of a dollar figure the industry needs? And to what end?

You want to start, kill C-69 and C-48, dead gone they were stupid and vindictive. Work through energy east, put a buy Alberta Oil first and tell Saudi Arabia and Venezuela to piss off..


I don't know the valuation of a assistance package I leave that to other more expert users.



At the end of the day, realistically the government has burned through over 250 billion and the O/G industry realistically got 1.8 billion to do some well cleanup. The government has to realize that without the support of the Oil and Gas industry they're not going to dig out of this thing.
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Old 05-23-2020, 11:42 PM   #60
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Use emergency powers to push through energy east and create a grant program for those who wish to utilize our oil.

It's the only thing I think the government could do that would actually help long term.

Of course I don't believe they Trudeau would ever do this.
Had to fix this.
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