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When will Fort Mac Boom?

  • Last Updated:
  • Jul 1st, 2016 2:20 pm
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Jr. Member
Nov 26, 2014
133 posts
137 upvotes
Calgary
I don't think the oil sands will boom again until automated haul trucks are brought in.
Newbie
May 9, 2016
69 posts
29 upvotes
CalgaryExotics wrote: well it will definitely get back to around $80/barrel and that will provide me with hours and lots of to
You realize that new oil sands projects need 80+ just to break even right? Nobody will put capital into new oil sands projects when they can just do shale oil in the states. You need 100+.
Deal Expert
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Oct 26, 2003
39338 posts
6341 upvotes
Winnipeg
op, you don't need a permanent boom, just a temp one so you can get your exp and cert, then you can travel anywhere you want, the demand for people with certs is still there.
Deal Addict
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Jul 30, 2010
3349 posts
555 upvotes
VanIsBest wrote: You realize that new oil sands projects need 80+ just to break even right? Nobody will put capital into new oil sands projects when they can just do shale oil in the states. You need 100+.
LOL, that number is not only false, but completely arbitrary too.

SAGD projects run higher per barrel because the cost to produce steam is high (over $50), but Oil Sands projects that require a larger upfront investment run significantly cheaper per barrel (closer to $25-30). Old school oil wells also run pretty cheap, at around $250K per well to startup, and relatively low cost per barrel to produce. Add in a small TruckVue skid and you are up and running.

Current prices are producing profit for oil sands operations; you just won't see mega-investment at these price points because of the debt load.
Newbie
May 9, 2016
69 posts
29 upvotes
LeisureSuitL wrote: LOL, that number is not only false, but completely arbitrary too.

SAGD projects run higher per barrel because the cost to produce steam is high (over $50), but Oil Sands projects that require a larger upfront investment run significantly cheaper per barrel (closer to $25-30). Old school oil wells also run pretty cheap, at around $250K per well to startup, and relatively low cost per barrel to produce. Add in a small TruckVue skid and you are up and running.

Current prices are producing profit for oil sands operations; you just won't see mega-investment at these price points because of the debt load.
I clearly said NEW oil sands projects. For any new project, the "upfront investment" you speak of is factored into cost for breakeven analysis, not just future costs of operations. For existing projects, we don't take it into consideration because hey are sunk costs. $80 is already conservative. For the average producer, it's closer to $100.
Deal Fanatic
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Nov 2, 2013
5697 posts
1522 upvotes
Edmonton, AB
LeisureSuitL wrote: Oil Sands projects that require a larger upfront investment run significantly cheaper per barrel (closer to $25-30). Old school oil wells also run pretty cheap, at around $250K per well to startup, and relatively low cost per barrel to produce.

Current prices are producing profit for oil sands operations; you just won't see mega-investment at these price points because of the debt load.
The plant I work at produces WCS at $6.89/barrel cost. The thing is already built (sunk cost), so going forward now they are going to make money from it. But with low prices of the barrel, it's harder to attract the immense amount of investor money to build more plants.

Old school wells are also cheap production as the production process is much less complicated. You can look up Granite Oil Corp. for instance, which works a basin in southern Alberta. It is a "cheaper" stock in terms of P/E and how much they make from their assets. They just need mid $40s/barrel to break even and maintain 4.x% dividends to investors. I really liked CPG before they slashed their dividend as they work traditional basins and had production hedged at $70s/barrel for the last while and the next couple years.
CalgaryExotics wrote: well it will definitely get back to around $80/barrel and that will provide me with hours and lots of to
You're looking at it wrong. People who make money don't work for someone, and even then they put their money not just in one place.
Accountant (Public Practice)
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Oct 26, 2003
39338 posts
6341 upvotes
Winnipeg
FirstGear wrote: The plant I work at produces WCS at $6.89/barrel cost. The thing is already built (sunk cost), so going forward now they are going to make money from it. But with low prices of the barrel, it's harder to attract the immense amount of investor money to build more plants.

Old school wells are also cheap production as the production process is much less complicated. You can look up Granite Oil Corp. for instance, which works a basin in southern Alberta. It is a "cheaper" stock in terms of P/E and how much they make from their assets. They just need mid $40s/barrel to break even and maintain 4.x% dividends to investors. I really liked CPG before they slashed their dividend as they work traditional basins and had production hedged at $70s/barrel for the last while and the next couple years.



You're looking at it wrong. People who make money don't work for someone, and even then they put their money not just in one place.
what do you mean they are hedged at $70? you mean they were holding off till $70?
Newbie
May 9, 2016
69 posts
29 upvotes
divx wrote: what do you mean they are hedged at $70? you mean they were holding off till $70?
hedged means they protected against downside risk using forward contracts that locked in the selling price of a portion of their production at $70/bbl
Sr. Member
Sep 7, 2009
873 posts
511 upvotes
turkey9000 wrote: Keep your fingers crossed for a pipeline but I'll be shocked if we ever see 110+ oil again (as stated, prices can hit 50+/barrel again and US frackers can turn it on practically overnight).
Northern Gateway overturned today.
Deal Expert
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Oct 26, 2003
39338 posts
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Winnipeg
RiP alberta
Sr. Member
Sep 7, 2009
873 posts
511 upvotes
Could the last one to leave please turn off the lights.
Deal Fanatic
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Nov 2, 2013
5697 posts
1522 upvotes
Edmonton, AB
Yes, please leave and believe the media saying that the world is over. We don't need hippies smoking weed in mom's basement and kids who don't want to work hard and live off the bank of mom and dad here. Don't hit a pothole on your way out.
Accountant (Public Practice)
Deal Addict
Aug 14, 2012
1379 posts
179 upvotes
AB
I'm here to stay. Have nothing job wise to go back to. Where am I going to move? Ontario? Let's get real here.
Deal Expert
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Oct 26, 2003
39338 posts
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Winnipeg
turkey9000 wrote: I'm here to stay. Have nothing job wise to go back to. Where am I going to move? Ontario? Let's get real here.
what's wrong with ontario?
Member
Nov 19, 2011
305 posts
78 upvotes
Calgary
Every one should move to vancover and become real estate agents lol, you can pull in some decent cash with the few percent commission since those house go for so much and seems like lots of demand ;) . But seriously it isn't like there is no work in Alberta just not on the level of before, currently I'm sure lots of people have opportunity to work in fort mac at least since the fire there should be some opportunity in clean up and rebuild efforts, so can't we say it is booming now :)

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