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    Investor Confidence Increases in Saskatchewan Oil and Gas

    According to a recent article on CBC News, investors are increasingly placing their confidence in Saskatchewan oil, while investor confidence falters in Alberta.

    A Husky Energy employee is pictured at the Bolney/Celtic Oil Battery in the Lloydminster area of Saskatchewan. Husky recently opened a new thermal oil facility in the region. (Husky Energy).
    A Husky Energy employee is pictured at the Bolney/Celtic Oil Battery in the Lloydminster area of Saskatchewan. Husky recently opened a new thermal oil facility in the region. (Husky Energy).

    Recently, several acquisitions of oil and gas assets by companies such as Penn West and Husky Energy have taken place in Saskatchewan, with sale prices higher than expected. This is encouraging news for oilfield service companies in the province.

    According to Alan Tambasso of Sayer Energy Advisors, investors are favouring light oil, which is predominant in Saskatchewan, over heavy oil and natural gas, and this is due to current commodity prices.

    Tambasso also cites last month’s controversial changes to Alberta’s regulations, which now require that “the value of a company’s producing wells must be twice that of the cost of abandoning and reclaiming the wells at the end of their life”, as contributing to the discouragement companies from purchasing oil and gas assets in the province.

    The uncertainty in Alberta created by the regulatory changes is in contrast with the perceived stability in Saskatchewan. “Its regulatory process is straightforward.” writes Bakx. “Royalties are low, and the government is predictable, according to several analysts and company executives.”

    Drew Ross of Scotia Waterous suggests that these recent acquisitions in Saskatchewan are more of a coincidence than a trend. Deals are still occurring in Alberta, and with the price of oil currently around $50 US, he expects that more companies will take advantage of the deals to be had.

    Click here to read the full article on CBC News.

     

     

     

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