This was posted on a small oil company's blogThis was posted on a small oil company's blog I follow, but I kind of think the poster is correct. How much will this (if the poster is indeed correct) affect AKITA's future plans, possible debt reductions, future earnings and possible dividend payout. I am thinking, only perhaps delay things a few quarters. Everything at AKITA seems good and on track but we can not control oil and gas prices. What does everyone else thinks???
Lower wti prices may lower amount of rigs drilling plays that have both oil and associated gas production. Lots of montney oil wells still produce 300-500 boe eq natural gas.
Less wells need to be drilled in North America...period.
220 rigs working in western Canada and that is too much for amount of wells that payback under 1 year being drilled.
montny wells that do 60k barrels of oil and 0.3-0.5 bcc in first year don't look so hot at 60 wti-65 wti band.
it will take less drilling to turn this around.
Like bc has over 20 rigs drilling for ng right now and that is too even with lng opening.
next may this will be lower.
every rig drilling pads for a major that works year round is going to produce a lot of ng.
10-12 rigs is all bc needs to stay same
A lot of companies are going to be hesitant to pull back on rest of 2024 drilling plans because it is so bad when energy service companies have to do lays offs.
Right now is perfect amount of drilling at 220 when things are not too hot or cold..in fact still too much iron out there but better with rig culls over last 3 years.
companies like whitecap, baytex etc want competition in service sector and not just precision or ensign doing everything