As the windchills in North America and the geopolitical situations in the Middle East plummeted to kick off 2018, the price of oil decided on the inverse. Rising to over $60 per barrel, it saw the strongest start to a year since 2014. 

A continued decline in North American inventories resulting from OPEC's meetings in November, where the energy powers-that-be decided to extend production cuts into 2018, coupled with the lifting of America's export ban are among the largest contributors to the current trends. While the conflicts in Iran and North Korea, among others, haven't resulted in any major effects on output yet, they have added a bullish sentiment to the markets, according to Warren Waldegger of Fire Sky Energy.

"Looking at the current price, it's obviously quite a bit stronger than we've seen throughout most of 2017. We kind of started in the mid fifties, ended up in the low forties and then steadily climbed back to sixty. We've seen, probably since the middle of summer, a twenty to thirty percent increase in the price of oil, so that's very helpful in terms of cash flow in the industry. We're an industry that recycles our cash flow back into the drill pit and other activities, so that's going to have a positive impact for sure in 2018.

He added that this forebodes well in other ways for the southeast. As long as the price is kept in and around $60, he expects as much as a 20-30 percent increase in activity in the field.

"We started 2017 with about 43 rigs. That had dropped down into 20, and that's southeast Saskatchewan and Manitoba, and includes some potash work. However, just going into the Christmas break we were around 36 rigs, and the expectation is that we'll be back into that level as they ramp up after the new year. We're kind of back to, or at least getting closer to that forty rig level that we saw in early 2017. I think if these prices continue, we could probably see 35-40 rigs working here before the road bans."

Following that, producers will be keeping an eye on the next meeting of OPEC, which takes place in June. Decisions made there will have an influence on the summer's activities.

With the pace beginning to pick up in the industry, challenges also arise with the biggest being, in Waldegger's words, "to attract qualified men and women back to the industry. There's been a couple three years of downturn, and people have left. As things improve, we're going to need them back to do the work in the field, administrate and all those other things we do."

 

 

More Local News

City's Proposed 2019 Budget Includes No Increase In Taxes Or Utility Rates

The city is planning some ambitious ideas for the proposed 2019 budget, but they won’t be including any higher taxes or utlility increases. The proposed budget was prepared by city administration and…

Pharmacies Running Out Of Flu Vaccine

It’s been a tough flu season in Canada and now some pharmacies in the Estevan area have been running out of the flu vaccine. Jeff Hilderman at the Estevan Pharmasave has seen his pharmacy run out of…

Three Ballots Needed Each for Police Board, Remuneration Board

At City Council's regular meeting Monday night, two boards needed people on it from the public at large - and the results were so close there were multiple ballots needed. It took three votes for…

Building Permits In City Down In 2018

Building permits for 2018 were down significantly from 2017, Estevan city council learned Monday night. The monthly building permit report gave an overview of how many building permits the city…

Festival Of Lights Shone Bright in 2018

The Festival of lights had a great turnout in 2018. They jumped from 11 participants in 2017 to 25 participants this year in 2018 and had an abundance of positive feedback from people driving through…

*Update* SaskTel Experiencing Long Distance Issues

“All circuits are busy. Please hang up and try your call again later.” This is the message many across Saskatchewan are hearing this morning when trying to make a long distance phone call or a call a…

SHA Advice for Those With Seasonal Affective Disorder

Seasonal Affective Disorder is commonly known as winter depression. While the winter months, in particular, can be challenging for those who are dealing with S.A.D., the disorder is not necessarily…

Province Seeks Public Input on Sask Libraries Engagement Report

As part of the library engagement process, the public is now invited to provide their feedback on Legislative Secretary Terry Dennis’s Report of Saskatchewan Public Libraries Engagement. Over the…

Geothermal Plant Coming To Estevan

Friday's announcement of the Federal Government allotting $25 million towards a geothermal project caught many in the southeast by surprise, but it's a project that's been well in the making for a…

DiscoverEstevan.com is Estevan's only source for community news and information such as weather and classifieds.

Search the Biz Guide

Login