Alberta's oilpatch is on the upswing: Here's the proof

[thackney]

Alberta's oilpatch is on the upswing: Here's the proof
http://calgaryherald.com/business/energy/albertas-oilpatch-is-on-the-upswing-heres-the-proof
February 13, 2017

...Here are some of the numbers:

Shipments of energy products rose to C$8.52 billion ($6.47 billion) in December, the highest since November 2014 and almost double the 2016 low.

Canada exported C$22.7 billion in energy products last quarter, the most since 2014.

Heavy crude exports climbed to a record 396,000 barrels a day in November amid rising production, according to the latest National Energy Board data.

Crude by rail exports surged to 120,000 barrels a day, the highest in more than a year, as pipeline capacity grew scarcer.

Output in the oil and gas industry in November climbed 6.1 percent from December 2015 levels. That’s four times the pace of growth for the economy as a whole.

The number of active drill rigs topped 300 in the last month, almost 50 percent more than a year earlier and approaching 2014 levels.

Suncor’s production jumped to a record 738,500 barrels last quarter.

That’s just the short-term outlook. The long-term is also beginning to look rosier too.

One of U.S President Donald Trump’s earliest executive orders revived TransCanada Corp.’s Keystone XL pipeline after the project was rejected by President Barack Obama in 2015. In November, Trudeau approved two expanded crude export pipelines — Kinder Morgan Inc.’s Trans Mountain and Enbridge Inc.’s Line 3. The three pipelines combined represent a $20 billion investment, and will add sufficient capacity to handle about 20 years of expanding oil production in western Canada, according to National Energy Board oil production estimates.

[IsailedawayfromFR]

Ran across this some time ago.  Explains that some of the low rig counts since 2015 were caused by other than simply low crude prices in the past.

Alberta drilling rig count decline linked to NDP's royalty review
http://calgaryherald.com/business/energy/alberta-drilling-rig-count-decline-linked-to-ndps-royalty-review

[MajorClay]

Don't Oil sands have to have a much higher price than conventional wells?  Thought breakeven was around 60 per bbl

[thackney]

Don't Oil sands have to have a much higher price than conventional wells?  Thought breakeven was around 60 per bbl

Expanding an existing facility has a cheaper price than building new.  SAGD (Steam-Assisted Gravity-Drain) is cheaper than the mining operations.  Each type have a spread of high to low depending on site specifics.



http://blog.ihs.com/production-cost-and-the-canadian-oil-sands-in-a-lower-price-environment

Note:  The above chart is the cost to ADD production, not maintain existing production.  It is far less for keep what is already built running.

[thackney]

@MajorClay

Suncor is doing quite well, actually, against the odds
http://business.financialpost.com/news/energy/suncor-is-doing-quite-well-actually-against-the-odds
February 10, 2017

...Suncor is the biggest producer in Canada’s oil sands. And Canada’s oil sands, which require various forms of upgrading and processing to be usable, aren’t the cheapest barrels out there. Wood Mackenzie estimates the breakeven price ranges from about $46 per barrel at the low end all the way up to about $99. In contrast, U.S. shale basins top out in the low $70s and average about $50.

If Suncor’s 2016 results are anything to go by, though, those averages don’t really apply to it. It beat earnings forecasts for the fourth quarter handily, and oil sands production rose 9 percent for the year as a whole, despite the toll taken by Canada’s forest fires.

And Suncor’s cash cost for its oil sands business fell by 5 percent to C$26.50 (again, despite the impact of the forest fires). Even if you bump that up to account for a return on investment and unwind some of the benefit of a weaker Canadian dollar, it’s clear Suncor’s breakeven price is closer to $30 or $40 a barrel than $50....

[IsailedawayfromFR]

Don't Oil sands have to have a much higher price than conventional wells?  Thought breakeven was around 60 per bbl

the incremental economics to say drill wells to add production to fully supply a facility can be quite favorable.  To expand the facility is quite different.

Would need to know existing operating % of capacity.