Alberta Royalty Review = The death of the Alberta oilpatch

[Pan]

They invest where they see profit, they see profit here for a long time, its just a typical industry response when asked to give up more of their money. Every industry does it.

[digital-audiophile]

There is already not much profit when gas is at $7MMCF and it costs $6MMCF to produce right now, when the cost now goes up to $6.95MMCF to produce after royalty adjustments it is no longer viable to drill these wells.

This will cause the loss of jobs not only in the energy sector and will do nothing but hurt our economy.

Anyone that is old enough to remember the NEP and what it did to Alberta will be able to talk about job losses and things like people having to sell houses for $1 and walk away from their mortgages.

[Pan]

I'll help you find a new job in my hydrogen powered car :0

[Quagmire]

Personally I think if Encana doesn't like it,they should take a walk.It our oil/gas and if they want it they should be paying us our price.They need our oil more than we need them to drill for it.Any oil/gas company that isn't happy here is welcome to be replaced by one that will be.BTW I'm plenty old enough to remember the end of the last boom,and it was hard for some people,but when we see a 55% rise in profit of an already hugely profitable company,profit made on a resource that is owned by the citizens of the province (myself I think all Canadians should own it, but I don't think it works that way)then its time to spread the wealth.

[Zylumn]

My father in the 50's worked for shell oil co. as a driller. He has mentioned there are still dozens of wells that are still producing that he drilled in the 50's. He is not reaping the benefit of those wells as I am not but hopefully my grandchildren will.
Kevin

[StirCrazy]

That is nothing but fear mongering by EnCana trying to sway public vote. you think any other Provence is going to let them in with out tougher royalties? BC cost way more just in business tax alone and the regulations here would be worse than the Alberta royalties. I am from Alberta and did my stint in the oil patch. EnCana has to release this type of press report to keep shareholder from bailing. how about including a link to the royalties page also so you can see why they are so worried.

Steve

[Pan]

Originally Posted by Zylumn

My father in the 50's worked for shell oil co. as a driller. He has mentioned there are still dozens of wells that are still producing that he drilled in the 50's. He is not reaping the benefit of those wells as I am not but hopefully my grandchildren will.
Kevin

My father work out at the caroline gas plant (caroline alberta) he was a higher up there. It's going to run dry a good 20 years before they said it would. But that is the only one he knew of thaat did that. Internal estimates of their resources say they are not going to run out any time soon

[ed99]

It's sure interesting how different people see this issue depending on whether they are in the oil industry or not. It almost seems like we are looking at different things.

I work at EnCana so you know where I'm coming from. Just one comment about moving investment out of Alberta- it is simple fact, not a threat or scare mongering. The increase in royalties means that many of our AB projects that we had planned for next year are not as profitable as projects in BC or the US, so that is where the money will go.

Yep, the good folks in AB own the oil and gas and the government has leased the right to develop it in exchange for up to hundreds of millions of dollars in some cases. Changing the royalty structure breaks that deal. Legal? Yep. Fair? Depends on which side of the deal you are on.

Has the province benefited from oil and gas wells drilled in the 50s? We have no PST here and our income tax rates are lower than anywhere else in the country. Chicken on the Way is advertising $15/hour for workers (though that probably includes some danger pay) where when I was a punk teenager I considered myself fortunate when I found a gas station that would pay me $4.50.

A change to the royalty structure is overdue. This one was done when oil prices were around $10/bbl. Nobody is looking for sympathy, we're living in the best of times right now. The issue is future investment in AB which is what really drives the economy. The new royalty regime is going to reduce new spending by a lot, reducing future production and therefore royalty payments. It is particularly hard on new gas drilling, which is as big as the oilsands development, and unless we have a very cold winter in the midwest US, there is going to be a lot of suffering on the gas side of the industry. More than half of Alberta's rig fleet has been parked all year, and that was before the royalty review.

[Pan]

Yes and your 4.50 went a lot further than todays 15. I'm sorry but unless your on the high side of the "boom" you've suffered in Alberta.

[Sebae again]

Yeah and a house costs 5 times as much. I'd have a hard time finding someone working at a gas station making $ 22.50 an hour . Compared to the early eighties, I'm only underpayed by $ 65/hr. I guess I should'nt complain. Next year could be worse.