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Strategies & Market Trends : Strictly: Drilling II
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To: Roebear who wrote (9099)3/8/2002 2:04:36 PM
From: tommycanuck  Read Replies (1) of 36161
 
Hi Roebear;
What is happening with the weather? Pull your charts out and give me some hope. 38 below C this morning in Central Alberia (Alberta). Usually this is great news for the patch but doesn't seem to be helping the service businesses this year. Companies are racking rigs way earlier than I can remember in the past many number of years. The reduction of budgets, the ongoing movement of the US based producers into Canada and other minor problems such as tightness in pipeline capacity all will add to the sharp rebound coming at us maybe as soon as the fall. The market knows, for the most part, and we continue to hit highs in the oil and gas indexes on the TSE. The Canadian oilfield services business lagging a little but starting to feel better about the prospects down the road.
Talking to some of the people involved in the development of the Ladyfern project in NE British Columbia. Coming on stream at 600 million cf/day, with the pipeline capacity to allow it to get to 780 mmcf/day. They were unanimous in their thoughts that declines could easily reach 50% during the first year. Bodes well for the industry once storage is taken down by industrial recovery.
Less drilling, pipeline restrictions, increasing declines and economic recovery will set us up for a replay of a year ago not too far down the road IMHO.
In the meantime, fix the weather here, or better yet send it east and south.
Have a good weekend.

Regards

TC
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