CALGARY – The Conference Board of Canada says oil and gas producers are expected to dive into the red this year, but begin crawling back to profitability in 2016 as cost-cutting efforts bear fruit.
The Ottawa-based economic think-tank is calling for an industry pre-tax loss of $2.1 billion in 2015 compared to profits of $6 billion last year.
U.S. benchmark crude oil prices have spent much of 2015 languishing below the US$50 a barrel mark — dropping below US$44 a barrel in recent days, around 60 per cent lower than its 2014 high.
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The Conference Board outlook comes a day after Alberta’s NDP government posted its first budget — with a $6.1-billion deficit and a plan to borrow money to cover day-to-day programs.
It also follows an announcement from European energy giant Royal Dutch Shell that its Carmon Creek oilsands project would be scrapped.
Meanwhile, oilsands producer MEG Energy has posted a quarterly net loss of $427.5 million — but on the bright side, says it’s managed to knock its operating costs down to $9.10 a barrel, compared to $10.31 last year.
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