the fire and your alberta/ resource stocks

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Profit not Prophet
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the fire and your alberta/ resource stocks

Post by Profit not Prophet »

Firstly sympathies to all the dislocated people in Northern Alberta.

Some reports suggest the northern Alberta fires could last upwards of several months. I wonder if any western based residents or wise grey hairs might add their two cents about wider stock related results of this event.

I'm Ontario and kind of wonder if oil production would be down for weeks why would say Enbridge for example not be down more now than they are? There seems to be a bit of a delayed reaction to this? Why wouldn't rail lines be down more if this volume reduction might greatly what amount is still currently going to market by rail?

To far off here to have a sense of the range of outcomes but it seems remarkably small given the events. Any thoughts? Confused.
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Re: the fire and your alberta/ resource stocks

Post by DenisD »

One of the reasons for not shutting down oil sands facilities was that it was too expensive to start production back up again. I wonder if some of the facilities that are shut down will remain shut down until prices improve.
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Re: the fire and your alberta/ resource stocks

Post by kcowan »

Yes I don't think there will be adverse effects on the production companies. They will welcome the cutbacks. There will be some impact from inability of families to locate near the sites where the wage-earner commutes when they start up again.

I just hope the governments will build a model town now they have the chance.
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Shakespeare
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Re: the fire and your alberta/ resource stocks

Post by Shakespeare »

DenisD wrote:One of the reasons for not shutting down oil sands facilities was that it was too expensive to start production back up again. I wonder if some of the facilities that are shut down will remain shut down until prices improve.
There are generally routine shutdowns for maintenance and occasional shutdowns for equipment failures. The current shutdown falls in that category, not a complete shutdown/mothball.
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Re: the fire and your alberta/ resource stocks

Post by Dudsy »

Profit not Prophet wrote:I'm Ontario and kind of wonder if oil production would be down for weeks why would say Enbridge for example not be down more now than they are? There seems to be a bit of a delayed reaction to this? Why wouldn't rail lines be down more if this volume reduction might greatly what amount is still currently going to market by rail?

To far off here to have a sense of the range of outcomes but it seems remarkably small given the events. Any thoughts? Confused.
There is a considerable amount of oil storage in the Edmonton and Hardisty areas. I don't know the total storage capacity, but a quick search produced an article from last summer that mentions 5.5mn bbls of capacity under construction adding 12% to the region... which implies over 40mn bbls of total capacity. Enough to keep the pipes full for bit.
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Re: the fire and your alberta/ resource stocks

Post by AltaRed »

Oil sands magazine has a chart on storage facilities. IIRC from what I read a few days ago, Hardisty alone has circa 40? MM barrels of storage. Perhaps another 10-20 MM barrels at all other terminals combined. At the same time, some oil sands operators have already issued force majeures on some customers, so there is a disconnect/conflict from my perspective of those two thoughts. It was further reported today from 'experts' that gasoline shortages could start to occur in the prairies, and specifically AB in as little as 7-10 days if some of the oil sands production is not brought online fairly quickly. What that all suggests to me is there is not a lot of slack in the system.

Oil sands operators are to meet with Notley Tuesday on a plan to get enough oil sands workers back into Fort Mac as soon as possible so that they can restart their plants. I would have thought there might be enough camp beds around to do some basic but limited production starts and then operate on a limited basis until enough people can return to their Fort Mac homes. ATCO has just sent 250 people with self-support to Fort Mac to get the electrical distribution system up and running. Same thing to happen on Nat gas, and then ultimately water and sewage. I will speculate that quite a bit of this can be up and running within 2weeks. Remember that about 85-90% of Fort Mac is undamaged and key infrastructure and the downtown is essentially intact (maybe a few hotels notwithstanding). The key question is how fast people can return to their homes.

i am of the view that there will be minimal impact on company bottom lines beyond some effect on 2Q results.
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Profit not Prophet
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Re: the fire and your alberta/ resource stocks

Post by Profit not Prophet »

Thanks all and Red in particular. Not that I was wishing for bad news or looking to add to any positions........... but didn't want to happen to pick up 100 or 200 then get played for a bigger chump than usual :)
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Re: the fire and your alberta/ resource stocks

Post by j831robert »

It's all in the wording of "resources" so I'm probably off subject but would draw your attention to Northview Apartments REIT NVU.UN which happens to own quite a number of structures (apartments and condos) located in the city centre and all untouched by the fire. For the buy and holders they would appear to have great potential for a steady income while the city rebuilds.
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Re: the fire and your alberta/ resource stocks

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j831robert wrote:It's all in the wording of "resources" so I'm probably off subject but would draw your attention to Northview Apartments REIT NVU.UN which happens to own quite a number of structures (apartments and condos) located in the city centre and all untouched by the fire. For the buy and holders they would appear to have great potential for a steady income while the city rebuilds.

And this is one REIT that could really use a bit of 'good' news. Ever since the eastward expansion, they've come up a clanger! I own it.

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Re: the fire and your alberta/ resource stocks

Post by j831robert »

2Yen. I've owned this one since Jan 2003 and the monthly distribution hasn't faltered so I'll hang in with the current ups n' downs. More to the point of "resource stocks" we (my wife) hold a goodly number of units of Pembina Pipelines (PPL) going back to Sep 2000 and they seem to be holding out quite well market-wise. We'll continue holding but won't add methinks.
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