Official (Alberta) Oil Discussion Thread

[Ozy_Flame]

Originally Posted by JFK

lmao.. it was an oddly comforting and personal message about a secretary quitting.

We both know the individual in question. And there are plenty of people who could probably step in in this economy and do just as good if not better.

[nik-]

so, he'll find someone better?

[Muta]

Originally Posted by burn_this_city

So its lesser because its in O&G. Gotcha.

Nah, just riskier as a career move. But keep being Chris Steele over there!

[Lubicon]

Originally Posted by GP_Matt

A lot of companies now are looking to lock in rates with service providers for longer terms. There are a bunch of RFP's looking for five year rate commitments.

Past RFPs were all about lower rates but no commitment.

Interesting. They should expect to pay higher rates as I don't think anyone wants to commit to 5 years at current rates, there is little profit currently. Either that or service companies need to be creative to recover costs. One of the biggest issues we are having is operators are all about rates and little thought goes into the quality of the service (or in our case time to perform the service). RFP's are often so inflexible that service companies cannot offer unique or alternative services that would save money in the long term, there is no provision for this in the RFP's.

[Fuzz]

Interesting article on the future of oil and gas demand relative to EV's.

http://boereport.com/2017/11/20/how-...nd-gas-demand/

[Hack&Lube]

Originally Posted by Lubicon

Interesting. They should expect to pay higher rates as I don't think anyone wants to commit to 5 years at current rates, there is little profit currently. Either that or service companies need to be creative to recover costs. One of the biggest issues we are having is operators are all about rates and little thought goes into the quality of the service (or in our case time to perform the service). RFP's are often so inflexible that service companies cannot offer unique or alternative services that would save money in the long term, there is no provision for this in the RFP's.

Yeah, but they are probably banking on a lot of service companies having cashflow issues right now and contract is better than no contract. They are trying to lock in cheap prices while they can with some desperate folk.

[Weitz]

Rates are definitely starting to creep back up, and so far I haven't seen much push back from Operators.

Note: I don't do any work for CNRL.

[Lubicon]

Originally Posted by Weitz

Rates are definitely starting to creep back up, and so far I haven't seen much push back from Operators.

Note: I don't do any work for CNRL.

Might be specific to certain services, we have seen incredible pushback to any attempt at price increases in the particular line of work I am in. Frustrating to the point that we are declining to even bid on some work for some operators who have gained a reputation for being cheap.

Hack n Lube is also likely right with the cash flow comment. And ironically it is again the Operators who are mainly responsible for this by dragging out payment for services well past 90 days in many cases. Average payment times have increased from around 60 days to 85 days from date of invoice according to our accounting people so we are now carrying almost three months of costs (including payroll) before we see any revenue for work.

[Weitz]

Originally Posted by Lubicon

Might be specific to certain services, we have seen incredible pushback to any attempt at price increases in the particular line of work I am in. Frustrating to the point that we are declining to even bid on some work for some operators who have gained a reputation for being cheap.

Hack n Lube is also likely right with the cash flow comment. And ironically it is again the Operators who are mainly responsible for this by dragging out payment for services well past 90 days in many cases. Average payment times have increased from around 60 days to 85 days from date of invoice according to our accounting people so we are now carrying almost three months of costs (including payroll) before we see any revenue for work.

I suppose that is probably true, I do deal with a wide variety of services and so far things coming up have been ok, But I guess one thing that I always still see push back on is Sub, mileage and things like that.

[Husky]

Originally Posted by Lubicon

Might be specific to certain services, we have seen incredible pushback to any attempt at price increases in the particular line of work I am in. Frustrating to the point that we are declining to even bid on some work for some operators who have gained a reputation for being cheap.

Hack n Lube is also likely right with the cash flow comment. And ironically it is again the Operators who are mainly responsible for this by dragging out payment for services well past 90 days in many cases. Average payment times have increased from around 60 days to 85 days from date of invoice according to our accounting people so we are now carrying almost three months of costs (including payroll) before we see any revenue for work.

And operators cash flow is anywhere from 25-55 days depending upon the day of production.

[Lubicon]

Timely article illustrating exactly what we are seeing in parts of the industry.

http://business.financialpost.com/co...-price-rebound

[Drummer]

With the extreme cold temps all across Canada and parts of the US, I'm hoping the demand for Alberta natural gas goes waaaay up.

[Azure]

Speaking of natural gas, it still amazes me that the federal government doesn't do something about helping expand the usage of natural gas in Canada.

With the high cost of developing more hydro projects, one would think it would make sense to help more people and especially businesses switch to natural gas.

[Fuzz]

The provincial government has done some great things with natural gas...like tax the ever-loving crap out of it...

[cal_guy]

Originally Posted by Azure

Speaking of natural gas, it still amazes me that the federal government doesn't do something about helping expand the usage of natural gas in Canada.

With the high cost of developing more hydro projects, one would think it would make sense to help more people and especially businesses switch to natural gas.

Natural gas already accounts about half the heating in Canada with electricity from hydro accounting for most of the rest. The only place that still uses heating oil to a significant degree is in the Atlantic provinces which are difficult to supply with gas because of their isolated location and their small population.

Originally Posted by Fuzz

The provincial government has done some great things with natural gas...like tax the ever-loving crap out of it...

Natural Gas is between a quarter and half the price that it was 10 years ago.

[Drummer]

Northern Alberta county under state of emergency due to low natural gas pressure
http://www.cbc.ca/beta/news/canada/e...tage-1.4468224

[Drummer]

5 things to watch in energy in 2018.

A great read, including some natural gas discussion.
http://www.cbc.ca/beta/news/business...head-1.4456819

[Regorium]

Any thoughts on Q1 in the oilpatch?

Obviously 2017 was a terrible year, especially on the stock market for the junior/intermediate players.

What do you guys think the outlook will be for this year for the CPG, WCP, MEG, BTE and others?

Personally, I think we're finally at that point where the patch will start picking up steam again. I think the impetus might be getting some pipeline projects completed (like Enbridge Line 3 that might come in service in 2018) that might shore up confidence and reduce the horrific differential.

I don't think we'll get back to 2014 hubris and stock prices, but I think there will finally be a positive trend.

[Azure]

Originally Posted by cal_guy

Natural gas already accounts about half the heating in Canada with electricity from hydro accounting for most of the rest. The only place that still uses heating oil to a significant degree is in the Atlantic provinces which are difficult to supply with gas because of their isolated location and their small population.

That could be, but where I live there is no access to natural gas as a heating/fuel source, and people are stuck using hydro or propane. Hydro is cheap, but prices are going up, and the cost to develop NEW hydro is also super expensive.

Seems to me like hooking up more communities, towns and rural areas with natural gas would be a good way to offset the growing cost of developing hydro. Seeing yearly 5-10% price increases on hydro and billion dollar cost overruns on hydro development makes it obvious.

Natural Gas is between a quarter and half the price that it was 10 years ago.

Which is good for consumers. If we want to help the suppliers we need to grow demand.

[Lubicon]

Activity wise it will be okay. Not spectacular but okay I think. There was more optimism a few months ago but the prolonged depressed gas prices have apparently put a bit of a damper on things. We've seen our customers reduce their drilling plans for 2018 in the past month or so from what they were intending on doing late last year and a lot is due to gas prices. So that will put further downward pressure on costs for services which means it will be another tough quarter for the service companies. Activity might be okay but there isn't much profit in the work.