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To: Johnny Canuck who wrote (51264)	1/28/2015 9:57:03 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 67677

Survival of the fittest? Rick George expects oil patch to keep pumping even at $30 crude Sandra Mergulhao, BNN.ca staff 4:00 PM, E.T. \| January 21, 2015 CEO Interviews, Energy & Resources Tags: Oil, Suncor Energy Follow this As Canada’s oil sector tries to defend itself from a new crude reality, former Suncor CEO Rick George says he believes the country’s oil producers will be able to maintain current production even if oil prices crater. “If you think about the Canadian oil sands, you are not going to cut production because you already have that capital investment and you’re good to an oil price down below $30 a barrel,” he says. “For the conventional side, it’s always a lag between when you put capital in and when production starts to drop off. I would expect Canada’s production to stay relatively flat through this period,” he adds. “But it will be a much slower increase than we saw before this event.” While George believes most of the spending cuts are over, he says more cuts could come after the spring break up, when drilling activity in much of the Western Canadian Sedimentary Basin comes to a standstill due to muddy terrain and weight restrictions on heavy vehicles. Oil rebounded from the biggest drop in a week to $47.75 a barrel in New York. West Texas Intermediate crude has dropped more than 10 percent this year following a decline of almost 50 percent last year, the most since the 2008 financial crisis. Earlier today, the Canadian Association of Petroleum Producers (CAPP) cut its 2015 growth forecast by 65,000 bpd and by 120,000 bpd for 2016. It also sees a 33 percent drop in energy spending this year. George believes the slide in oil prices will be a 6-9 month cycle that will weed out oil and gas firms with weak balance sheets, subpar assets – or both. “This industry does a little bit better when we go through these downturns every few years.” “You need these cycles to help on a number of cases. First of all, it does slow down the flow of capital into the industry on a world-wide basis. It also really shows who has good assets and who doesn’t have good assets. And so, I always call this a kind of a cleansing of the industry every once in a while a good event overall.”