WINNIPEG, Manitoba/CALGARY, Alberta (Reuters) – Small and mid-sized Alberta oil producers are looking to increase drilling as early as this autumn after the Canadian province exempted a dozen of them from government-mandated oil production cuts, boosting the struggling industry.
Alberta’s previous New Democratic Party government imposed production limits in January to drain an oil glut that built up due to congested pipelines.
Tuesday - United - Conservative - Party - Government
On Tuesday, the new United Conservative Party government extended curtailments through 2020, citing a delay to Enbridge Inc’s Line 3 replacement that could swell inventories again unless the limits remained in place.
It also doubled an exemption threshold in the curtailment policy to 20,000 barrels per day (bpd), eliminating constraints on 13 companies whose output falls below that level. Alberta’s 16 biggest producers will be the only ones receiving curtailment orders starting in October.
Capital - Share - Buybacks - Saskatchewan - Tamarack
“We were diverting capital into share buybacks and into Saskatchewan,” Tamarack Valley Energy Ltd Chief Executive Brian Schmidt told Reuters in an interview. “Now we’ll put capital back to work in Alberta.”
Tamarack will adjust 2020 capital spending plans because of the changes and could lift its Alberta production by another 2,000-3,000 bpd, Schmidt said. The Calgary-based company currently produces 11,000 bpd in Alberta, just under half its total output.
Producers - Whitecap - Resources - Inc - Athabasca
Other producers that benefit include Whitecap Resources Inc, Athabasca Oil Corp, Pengrowth Energy Corp, Baytex Energy Corp and Obsidian Energy Ltd, AltaCorp Capital Research said in a note.
Pengrowth deferred spending more than half of its C$45 million ($33.9 million) capital budget earlier in 2019, but now looks to increase drilling as early as October, Chief Executive Pete Sametz said. That will also reduce the need to buy credits from other producers that allowed Pengrowth to produce over its quota, he...
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