Why aren’t drilling rigs flying out the door?

21 Replies to “Why aren’t drilling rigs flying out the door?”

1. Does it rhyme with ‘dederal megulations’?

2. Government… the answer is always government

   1. Especially when it’s the wrong answer.

3. You can drill all you want – how you gonna move it to a market that is paying world price?
   Agree with the previous posts.

4. The rise in the price of oil is not sufficient to offset the rise in interest rates. The marginal drilling project will not pay off.

5. I’m sure Pete “loyal opposition” Poilievre will fix Canadastan as LibCon PM

6. never trust the fed liberals or the dips . they are still there

7. The Sask portion of the WCSB is smaller than Ab’s and has been worked hard since the 1950’s.
   Also an increase in red tape from all three levels of government.
   Also hard for small operators to raise money via IPOs.

8. First Timer is correct. You have no spare capacity. No pipeline capacity, no rail capacity.
   If you can’t sell it, it’s worthless, may as well leave it in the ground. You have the same rail capacity as you did in 1965, maybe less.
   Anyone know of any new pipelines being built in Canada, or railway lines being laid down? I don’t!

9. Heh, tragically related:
   Warren Buffett please call your office; Warren Buffett…
   https://www.lucianne.com/2023/09/05/biden_admin_quietly_reverses_trump-era_rule_bans_transporting_fossil_fuels_by_train_114333.html

10. 8 years of downturn including layoffs, scrapping inventory, and relocating to the US is not an easy turnaround regardless of increased oil prices. Political uncertainty and government dampening of profitability make any operators/speculators uneasy at this stage to simply “pull the pin”.

11. Shareholders won’t be rewarded for companies taking on debt or dilution to grow. Bottom line.

12. Because you’d have to be crazy to spend that much money in this country right now, particularly in the oil business.

    It doesn’t matter what the price of oil is when you pretty well know the government is going to destroy your investment.

    1. That’s not unique to OIL and Gas, that’s a universal truism.

       1. “That’s not unique to OIL and Gas,”

          Any mid to large Oil & Gas company has the unique option of investing in a plethora of Oil & Gas friendly countries around the world outside of Canada with far less overhead.

       2. Unless your business is in Quebec or related to green energy in southern Ontario.

13. Capex discipline, maintaining but not increasing reserves, egress constrained, directing free cashflow at dividends, debt retirement, and share buy-backs after learning what debt-financed capex did to the market after 2014. Between O&G and Gold stocks, they are the cheapest stocks in the market now. Uranium’s also killing it. Real energy and real money, who could have seen that coming.

14. My first guess would be higher interest rates raising borrowing costs. John Chittick mentions “capex discipline” which probably means balancing production. But my gut says the oil guys (and gals) feel the Federal Government doesn’t have their back, so why should they bust their butts to increase the oil supply.

15. Those oil prices aren’t net of gov’t theft, aka carbon taxes.

    And those taxes keep going up, and up, and…

16. Anyone else remember when these rigs had a big arse Canada flag at the very top snapping in the brisk wind?

    Now, not so much, eh?

17. Canada?