16 percent rig utilization Jan 4

[Mangosteen]

Incredible.

Now that the north is frozen in ( or could be ) today's rig utilization is only 16 percent in contrast to around 90 percent for this most opportune time for muskeg access.

Never thought I would ever see the day.

The ripple effect of this will be incredible all over the province.

No end in sight yet.

I wonder how much marginal production is going to be shut in next.

[Bergerboy]

Its over.

[Mangosteen]

I wonder what the banks are going to do with all the equipment.

Ritchie Bros will be interesting in the next few months.

[Bergerboy]

Originally Posted by Mangosteen

I wonder what the banks are going to do with all the equipment.

Ritchie Bros will be interesting in the next few months.

Lots of stuff will go south again as the yanks will get good deals with the condition of our dollar. Ritchie Bros will have another good run.

[sirmike68]

Yup not good, the refinery is reduced to 60 % capacity throughput because all the tanks are full and no buyers. Strange how diesel price will not drop below 90 though. Thieves.

[Mangosteen]

Originally Posted by sirmike68

Yup not good, the refinery is reduced to 60 % capacity throughput because all the tanks are full and no buyers. Strange how diesel price will not drop below 90 though. Thieves.

Goldman Sachs was giving a warning early Dec about the first quarter of 2016 and no storage capacity in North America.

Well with no rigs running and no hauling, no dozers running, no water trucks, no generators etc. Not to mention all the completions and testing operations suspended. Stimulation gone. Pipelining gone.

I bet the only drilling going on is to prevent leases from expiring or farm in commitments to hold land. Nothing more. Dismal.

We just shut down around 3000 gallons a day times 500 rigs and not even counting the ripple effect so diesel demand is no longer there.

I wonder if the planners are going to double or triple the police force in the province. I can see a big crime spree coming.

[gman1978]

Originally Posted by Mangosteen

Goldman Sachs was giving a warning early Dec about the first quarter of 2016 and no storage capacity in North America.

Well with no rigs running and no hauling, no dozers running, no water trucks, no generators etc. Not to mention all the completions and testing operations suspended. Stimulation gone. Pipelining gone.

I bet the only drilling going on is to prevent leases from expiring or farm in commitments to hold land. Nothing more. Dismal.

We just shut down around 3000 gallons a day times 500 rigs and not even counting the ripple effect so diesel demand is no longer there.

I wonder if the planners are going to double or triple the police force in the province. I can see a big crime spree coming.

I am not sure about the crime spree thing. Thieves are thieves and I don't think a good person is going to steal because they lost there job. I guess people with addiction problems will steal to feed the habit if the bank account is dry. Maybe I am wrong !!!

[Albertacoyotecaller]

The auction house always does well!

[JustBen]

Doesn't leave me feeling warm and fuzzy inside...

[javlin101]

Originally Posted by Mangosteen

I wonder what the banks are going to do with all the equipment.

Ritchie Bros will be interesting in the next few months.

My BL just took a position in eastern Canada as the Manager of high risk purchases for Richie Brothers. He thinks he is going to be busy but glad he is not going to be in Alberta.

[hillbillyreefer]

I can't believe it's that high, it wil get worse. Factor in low energy prices and a government elected on a mandate to destroy every industry in Alberta, except civil service, what did anyone expect was going to happen?

Maybe we should raise taxes, and toss in a carbon tax to make things better.

Stupid voters create their own misery. Enjoy it!

[79ford]

Less oil drilling is the best thing that can happen during an oil glut, maybe companies will finally stop trying to increase production this year vs trying to pump more to make up revenue shortfall on the quantity side.

[rem338win]

Originally Posted by JustMe

Well, Hal if we subscribe to your philosophy, then barring a unrealistic jump in oil prices, that none of see happening, the tens of thousands of recently unemployed here in Alberta better beat the rush and look for jobs in the other provinces. Won't be any jobs here for years.... And sad to say, that may become a fact if we keep our heads buried in the sand and don't look to other industries.

I'm content with the unemployed moving along. We boomed and had a major influx; we're busting so the opposite should happen.

Maybe that will cause a positive turn in the political climate as well........

[coreya3212]

Hal has said it all. Some of you folks gloating need a reality check. And any government employee, yes any, would do well to envision their worst day ever at work, and then think real hard about the oil patch worker who has endured tougher coffee breaks.

[IR_mike]

Originally Posted by coreya3212

Hal has said it all. Some of you folks gloating need a reality check. And any government employee, yes any, would do well to envision their worst day ever at work, and then think real hard about the oil patch worker who has endured tougher coffee breaks.

Needing a like button here mod's.

What are these "coffee breaks" you speak of

[rugatika]

Originally Posted by coreya3212

Hal has said it all. Some of you folks gloating need a reality check. And any government employee, yes any, would do well to envision their worst day ever at work, and then think real hard about the oil patch worker who has endured tougher coffee breaks.

Now you got them thinking there are actually coffee breaks in the patch.


Haha...like IRMike said. Beat me to it.

[Y2K]

I heard oil was $33.00 today, would never know it at the pumps.

[Skytop B]

I would not trade this no brain job for anything Still busy and will just go back to the sandbox if I run out of work here. Pretty chilly out here today, go ahead and turn your furnace up a couple notches, your welcome



Where else can you work 2-3 weeks a month, take a 2-3 month holiday in the spring and still make a pretty good living. Not to mention free world travel for the experienced people with "no skills or real trade"

[Big Lou]

Originally Posted by Mangosteen

Incredible.

Now that the north is frozen in ( or could be ) today's rig utilization is only 16 percent in contrast to around 90 percent for this most opportune time for muskeg access.

Never thought I would ever see the day.

The ripple effect of this will be incredible all over the province.

No end in sight yet.

I wonder how much marginal production is going to be shut in next.

Where I'm at they've been shutting in marginal producers for over a year. When the price was high everything in the field was driven by volume. The transition at this point has been to everything being driven by pure economics. Which had to happen and is proving that you can still be profitable but at a smaller margin. I'm speaking of a transition from heavy to conventional also. Conventional has always been driven by economics.

As a company we are almost bang on with the average for activity industry wide at 16%. I've been watching a lot of the RB sales and agree with previous posts that equip will still move even if it is going south. There has not been near the level of bidding from the floor as previous.

[JustMe]

Before this gets political, it's not just an Alberta event, but all over. The new "norm" for the foreseeable future is $50/Bbl oil. Diversification is the key for Alberta and Canada. Time to get back to producing consumer goods, instead of just raw materails and there by supporting foreign ecomomies...

http://www.wtrg.com/rotaryrigs.html

Originally Posted by Mangosteen

Incredible.

Now that the north is frozen in ( or could be ) today's rig utilization is only 16 percent in contrast to around 90 percent for this most opportune time for muskeg access.

Never thought I would ever see the day.

The ripple effect of this will be incredible all over the province.

No end in sight yet.

I wonder how much marginal production is going to be shut in next.

[Deer Hunter]

Any jurisdiction in the world would give anything to have the natural resources Alberta has. Oil, NG, coal etc.
All we have done is mismanage it with the inability to realize global market prices and now we want to diversify into something else? Like what? I hear military weapon sales are hot right now. Anyone know how to build a fighter jet? When, as a nation, we cant even build a pipeline....

[ArtG]

Originally Posted by Deer Hunter

Any jurisdiction in the world would give anything to have the natural resources Alberta has. Oil, NG, coal etc.
All we have done is mismanage it with the inability to realize global market prices and now we want to diversify into something else? Like what? I hear military weapon sales are hot right now. Anyone know how to build a fighter jet? When, as a nation, we cant even build a pipeline....

Dont we already have one of those????? and they are asking for a bail out.

[ctd]

Not sure but $50 a bbl is pretty darn good price. We got greedy when the price hit $100. 08/09 was my busyest year despite being down for 3 months.

Right now Service companies are hiring. Where I work all three service lines coil frac and cement are booked solid untill spring.

What I have witnessed is for every 10 seasoned workers we hire only 2 or 3 of them are wOrth paying. I would rather hire green guys and train then put up with lazy disrespectful should have got out 10 years ago workers.

Yes it is slow. Drilling is different then it was 1, 5, 10, even 20 years ago.
What 4 rigs did 10 years ago 1 rig does now. What use to be a 2 month hole is a 3 week hole. What took 6 wells to produce only takes one well.
On one hand efficiencys have made the job quicker, on the other hand it has made the need for equipment less.
The cost of producing a single well has doubled or even tripled in price. The production of that one well have quaddroupled.

We had a frenzy at $100 bbl. Now we have effeciency. Lower rig count same production. It sucks but the new reality

[The Elkster]

I work with new wells and reserves regularly and I will say that the amount of reserves/well/$ has gone way down continuously not up as CTD suggests. Sure initial rates are high and initially these wells can look like boomers but if you run typecurves of the average well performance and look at the ultimate recoverable gas that number is smaller than we used to get with simple cheap vertical wells (and the same goes for oil). We used to regularly see 1-5 BCF gas out of a $500k vertical gas well and I've seen vertical wells at +20BCF. Now that we are working the very tight poor permeability source rock we are spending +3million per horizontal hoping to get similar cum production to the old verticals. That is not an improvement.

Much is made of out technological advances but technology doesn't change poor rock. Most of the recent improvement in well performance in the US is not due to tech improvements but rather a high grading of prospects and spending gobs of capital. Of course you'll see a volume/well improvement if you stop drilling the bottom 50% of your prospects. Also if you throw endless money at longer horizontals and more fracs you can get higher rates and reserves but at what price.

If you care to learn more on some of the unconventional details and analysis of various O&G trends check out this link... http://www.artberman.com/ Based on my experience Art is pretty much on point with cutting through some of the BS and digging into the real numbers...not just those spoon fed/cherry picked by various companies trying to boost their stock price.

[Hat in the Cat]

Originally Posted by JustMe

Before this gets political, it's not just an Alberta event, but all over. The new "norm" for the foreseeable future is $50/Bbl oil. Diversification is the key for Alberta and Canada. Time to get back to producing consumer goods, instead of just raw materails and there by supporting foreign ecomomies...

http://www.wtrg.com/rotaryrigs.html

Canada's economy is (in my opinion) quite diversified. The problem is that we have an abundance of resources one being oil. People seem to cling to the catch phrase "diversify" but there is no way for the other sectors to catch up with oil so they expect us to ignore oil to bring it down to a level in line with the remaining sectors.

Who knows, maybe the Saudis will bring the price back up to fill the coffers to deal with Iran...

[hal53]

Originally Posted by JustMe

Before this gets political, it's not just an Alberta event, but all over. The new "norm" for the foreseeable future is $50/Bbl oil. Diversification is the key for Alberta and Canada. Time to get back to producing consumer goods, instead of just raw materails and there by supporting foreign ecomomies...

http://www.wtrg.com/rotaryrigs.html

Alberta is ,and for the forseeable future, a resource driven economy. What are we going to diversify to?, producing consumer products here is a pipe dream when you consider the strangle hold the unions have on companies needing labor, it ain't gonna happen. At this point you will have a tough time finding anyone who would want to invest and set up business in Alberta with our current political climate. So the only thing you have left is for the Gov't. to borrow billions of dollars to entice fly by night projects to go ahead that the tax payer will be on the hook for....anybody remember Nortel?

[Hat in the Cat]

Nortel? Oh you mean the New National Defence Head Quarters Complex?

At least some of the money used to subsidise them came in handy
..

[Mangosteen]

If the inventory storage problem is as acute as Goldman Sachs predicted for North America the next stop will be 29 bucks a barrel.

I can see lower levels of inventory in your sporting goods stores. That Lund or Ranger fishing boat just got so much more to buy.

Above this the Royal Bank just announced they are raising Mortgage Rates.

The perfect storm.

[hillbillyreefer]

I'm predicting '80s bad. With the amount of personal debt out there, small upticks in interest are going to be extremely painful.
Junior O&G companies have started falling like dominos, the loss of work from those companies will snowball throughout the service sector. Once the trades and equipment guys take a hit every other business will start to suffer also.
With the dollar in free fall all our imported goods will continue to increase in price, consumers are already seeing that in groceries, soon it will be apparent in big ticket items too.
It's going to get ugly, batten down the hatches.


I hope I'm wrong!

[rugatika]

Originally Posted by hillbillyreefer

I'm predicting '80s bad. With the amount of personal debt out there, small upticks in interest are going to be extremely painful.
Junior O&G companies have started falling like dominos, the loss of work from those companies will snowball throughout the service sector. Once the trades and equipment guys take a hit every other business will start to suffer also.
With the dollar in free fall all our imported goods will continue to increase in price, consumers are already seeing that in groceries, soon it will be apparent in big ticket items too.
It's going to get ugly, batten down the hatches.


I hope I'm wrong!

Me too. I've never seen entire fields getting shut in like this before.