Alberta In Deep Doo-Doo -- August 31, 2015; Also, Steam-Assisted Gravity Drained Oil In Alberta

CTV news is reporting:

Alberta's finance minister says the province is on track for a record $5.9-billion deficit this year as the oil crunch hits families and businesses.

And Joe Ceci says the worst may not be over if low oil prices persist and the province continues in recession.

"If current conditions continue, the final deficit will be in the range of $6.5 billion," Ceci said Monday as he released first-quarter figures for the 2015-16 fiscal year which began April 1.

More:

Opposition Wildrose finance critic Derek Fildebrandt calculated the hit to Alberta's treasury is actually $9 billion when $3 billion drained from the contingency fund and new borrowing for capital projects are added in.

"This is the largest hit that our province has taken to its net wealth in the history of the province, and that should be concerning," said Fildebrandt.

Monday's numbers are based on the budget introduced, but never passed, by former Progressive Conservative premier Jim Prentice's government before it was defeated by Rachel Notley and the NDP in May. That budget estimated a $5-billion deficit.

It looks like the Canadian dollar is now around 75 cents/dollar.

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Some Good News Coming Out Of Alberta

This is really a great example of high-CAPEX projects that were started years ago, and despite the slump in oil prices, were allowed to be completed. Too much money had already been sunk in the project to cancel it.

At Seeking Alpha:

• ConocoPhillips says it has safely delivered its first barrels of oil at its Surmont 2 in-situ oil sands facility in Canada that has been under construction for five years
• COP says the project in northwestern Alberta will extract heavy oil buried too deep to mine using steam to heat up the thick crude to allow it to flow; the company says Surmont is the largest steam-assisted gravity drainage system in the world
• It is COP's second and larger phase of a 50/50 joint venture in the Canadian oil sands with Total; the two projects combined are expected to bring up 150K bbl/day, with the second facility building up production to 118K bbl/day through 2017.

Of course, new projects are being delayed or canceled. It will be interesting to see if maintaining production is cost-effective.

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EIA Update

The EIA sends this note:

With the release of today's Petroleum Supply Monthly, EIA is incorporating the first survey-based reporting of monthly U.S. crude oil production statistics.

Today's Petroleum Supply Monthly (http://www.eia.gov/petroleum/supply/monthly/) includes estimates for June 2015 crude oil production using new survey data for 13 states and the federal Gulf of Mexico, and revises figures previously reported for January through May 2015.

EIA estimates U.S. crude oil production in June 2015 at 9.3 million barrels per day, a decrease of approximately 100,000 barrels per day from the revised May 2015 figure.

"These survey-based estimates of U.S. oil production represent a significant improvement over our previous method of estimation" said EIA Administrator Adam Sieminski. "Domestic oil production has become an increasingly important part of energy supply in the United States, and this change in data collection gives the country a better way to assess the contribution of this resource."

Some comments later if I remember.