Oil has finally hit and surpassed the $50 mark but why isn’t everyone in the patch celebrating? While the price has slid back in recent days due to the outcome of the ‘leave’ Brexit vote, there is still and always a bright side. Natural gas is more than holding its own, and has just set a new 10 month high as of yesterday morning. And, as is usually the case, it now looks like the markets have settled back down and are adjusting to the new reality of the United Kingdom leaving the EU. Regardless of where you personally sit on the leave versus stay decision, the majority has spoken and now it is time to focus on the positive; striving to achieve the best possible outcome for the United Kingdom in the months and years ahead. Interestingly enough, this ties in nicely into the general theme for our issue this month.

Once again, I would like to personally thank you for spending some time with us by leafing through the pages and articles in our June edition of Oilfield PULSE. Our theme this month is ‘Rally for the Cause’.

The oil & gas industry in Alberta continues to take it on the chin, most recently with the unprecedented and horrific wild fires surrounding the hub of the Canadian Oil Sands, our beloved city of Fort McMurray. When will all the madness stop is anyone’s guess! As a former resident of Fort Mac, it certainly saddens me to see my old townhouse has burnt to the ground in Beacon Hill. Even more so, to witness yet another devastating below-the-belt blow to the already beleaguered oil & gas companies and their people across Canada.

Yet despite adversity, we see and experience people and politicians of every persuasion rallying together to support those who have been displaced. It is so heartwarming to see this occur, we felt it was time for a feel good issue hoping and longing for sunnier days ahead. As our friend Mr. Spock would say

“The needs of the many outweigh the needs of the few, or the one”. In the face of this devastation, personal tragedy, and lost production, human nature quickly taught us a lesson once again. Simply how much can be accomplished when we all put aside, however briefly, our political, environmental, social justice and business interests to help our fellow Canadians in their time of need.

The oil & gas industry in Alberta
continues to take it on the chin, most recently
with the unprecedented and horrific wild
fires surrounding the hub of the
Canadian Oil Sands, our beloved city
of Fort McMurray.

And now wouldn’t it be great if we had Captain Kirk and Mr. Spock on the oil & gas bridge to fight the battle and unite our provincial and federal politicians on behalf of ‘The Needs of the Many” on several of the divisive issues such as royalties, carbon taxes, climate change, and pipeline approvals? They always won! But back to reality. With oil prices hovering somewhat steadily in the $50 range and gas prices showing some signs of strength; is this just a false sense of the mid- year-demand security? Or, can we finally let ourselves change the constant tales of despair into conversations of happier times? Perhaps, just perhaps we all hope the worst is now behind us!

Yet there seems to be another interesting tug-of-war happening in the industry right now which we believe is also impacting the industry from putting the bit back into the ground. Companies that are well heeled with cash in the bank, or backed by large sums of investment capital, are on the hunt for producing assets at bargain basement prices. Why would you blame them? All the buyers are hearing these days is the despair and sense of urgency being espoused by those companies that are struggling to keep their doors open. We have asked a number of these fortune seekers why more deals are not closing and being announced in the press each and every week. One would think with everything that is happening, or should we say isn’t happening, that there would be a press release every other day announcing the next deal or acquisition. But that just doesn’t seem to be happening. Why?

On the other end of the stick, the less fortunate companies doing everything possible to stay alive, are hanging tough to the bitter end not wanting to divest valuable assets, particularly when oil prices are inching their way back to some sense of a new normal. Here too, you can’t blame them for acting this way! They’re holding out to realize the very best price for their hard earned assets and secondly, maybe, just maybe, they might be able to hang on long enough through the downturn and come out the other side. Perhaps a lot leaner than before, but to survive nonetheless.

So what’s transpiring? A bit of a Mexican Standoff! Neither party willing to budge, unless of course you add a bank or some disgruntled investors into the negotiation mix. When someone’s hand is being forced, deals are closing, but without that type of external pressure, deals which would normally close in weeks, are now closing in months, or not at all. Our Oilfield HUB Inc. team is aware, or directly involved in several of these anticipated deals. Standing arm-in-arm with our producer clients while they wait for the phone to ring, the wire transfer to arrive, and the deals to close! All while the energy services companies in the HUB’s online supply network are waiting very impatiently for that next project to be awarded and dollars to flow once again.

Where will we all end up for the rest of 2016 and into 2017, read on to get a glimpse of the future. Without a doubt, we and everyone we are speaking to in the oil & gas industry are banking on the wisdom and parting words of Mr. Spock, let’s all ……. Live Long and Prosper!