Oil price fallout: Suncor cuts spending, employees as oil prices plunge

(Reuters) – Canada’s largest oil and gas company Suncor Energy Inc said on Tuesday it would cut about 1,000 employees and contractors, freeze hiring and slash C$1 billion (US$837 million) in capital spending in response to falling crude oil prices.

Suncor said it would also defer some capital projects that have not yet been sanctioned, such as MacKay River 2 in northern Alberta and the White Rose Extension offshore Atlantic Canada.

Production outlook for 2015 remained unchanged at 540,000 to 585,000 barrels per day.

“Today’s cuts are consistent with our commitment to spend within our means and maintain a strong balance sheet,” Suncor Chief Executive Steve Williams said in a statement.

“We will monitor the pricing environment and take further action as required”…

Related: Alberta expects C$500 mln budget shortfall this year

C$ holds near 5-1/2-year lows as oil dominates

Breakeven and shut-in prices for oil wells: (Reuters) – How low must oil prices fall before production starts to level off and even decline to rebalance the market?

There is no straightforward answer because it depends on so many factors most of which are uncertain or not observable…

…Shut-in prices refer to the minimum wellhead price operators need to continue producing from a hole which has already been drilled and completed and is in production… Shut-in prices are as low as $15 per barrel in North Dakota’s Bakken, according to North Dakota’s Department of Mineral Resources. Elsewhere, however, operating costs and corresponding shut in prices are much higher…

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  • Exile1981

    There are some Alberta wells down under $10 shut in price, but most are closer to $20-$30 and a few are way higher. This middle east price war is going to hurt in the short term.

  • David Murrell

    I have been doing some blogging on business pages on this. If one looks at charts of oil and natural gas prices (and other commodity prices), they are going straight line down. Some of this are second-by-second speculators (they’re crazy), but things are worse than most people realize. There is going to be a big time recession in Alberta, and in other energy regions.

    I am not sure economists and other know about what benefits will take place, for energy consumers. But there will be more people going out for Sunday drives, one would guess.

    • DMB

      So much for the idea of leaving Kathleen Wynne’s Ontario for a well paying career in the oil & gas industry in Alberta or Saskatchewan!

      • Frau Katze

        I’m afraid so.

    • DD_Austin

      I found the crisis bullshit, but where’s the beef*?

      The only people whining here should be the chinese

      Ever wonder “where did all the money go from the profitable years”
      down a government/corporate blackhole perhaps? Nothing for a rainy day?
      and why are the yet still millionaires ALL suddenly “broke” and “why is it a problem when millions of dollars of disposible income are put into the hands of millions of people who will spend it a problem?

      Adam Smith would also like to know

      P.S. Adam Smith thinks those modern economists are paid corporate lackey retards who are really PR clerks for corporate welfare bums.

      * Alberta beef that is, oil isnt their only export

    • Frau Katze

      It should some positive impact too, but people whose business requires them to buy a lot of fuel might be wondering how long it will last and thus not reducing prices.

  • dance…dancetotheradio

    If this makes Alberta a have not province for a while I am all for it.
    No, not because I hate Alberta.
    Because I hate equalization and how it incentivizes irresponsible have nots to have not more.