Shale gas explosion forces mid-caps to focus on oil using technologies baptized in shale search
First came the revolution in natural gas production - the shift to shale gas which, by bringing huge new stores of natural gas into the market drove prices down and made it necessary to fundamentally restructure Canada's gas-prone petroleum sector. Now comes the revolution in the oilfield. Ironically, the same technologies that made shale gas possible are enabling the industry to begin the restructuring that the shift to shale gas made necessary.
As lines of bank credit grow increasingly more restrictive, royalty financing offers new options for operators
It can be tough to get credit these days, especially if you're a natural gas producer. What are you going to do?
One possibility is to do what Compton Petroleum did last spring. Primarily a gas producer, the company sold a five per cent royalty interest in 19,000 barrels of oil equivalent production per day, plus a five per cent interest in 600,000 undeveloped acres to Caledonian Royalty Corporation, a company founded and managed by oil and gas financier Jim Kinnear.
Mike Tims, co-chairman of Peters & Co., got into this business 32 years ago "when we were two years away from better natural gas prices. And now we're still two years away from better natural gas prices," he says with a chuckle. Of course there were peaks and valleys, but over the decades, natural gas has been a price-challenged commodity in North America.
As Oilweek looks to 2011, we asked David Collyer, president of the Canadian Association of Petroleum Producers, for his thoughts on issues front and centre with the Canadian oil and gas industry
Oilweek: Over the past year, various facets of the oil and gas industry were exposed to the public in less than flattering light. The BP incident in the Gulf of Mexico, the pipeline leaks in the northeastern United States, the ongoing image challenges faced by the oilsands industry and, to a lesser extent the unconventional gas industry, were key flashpoints for the industry in 2010. Do you sense a lingering fallout from any or all of these incidents going forward in 2011?