Archive for June 2011

Ah, the good old days of Cannons baseball and countless tarp pulls…   Leave a comment

A quick one today, gang, as I get the monthly newsletter ready to go.  I just noticed this article in the Calgary Herald today (originally published on June 3), and seeing how it’s such a nice day out, I couldn’t resist putting it in the blog.  I worked for the Calgary Cannons for five years.  When the skies turned black and the rain fell, I helped (I wouldn’t go so far as to say, “volunteered”) pull the tarp across the infield in order to keep it as dry as possible, in the hopes we’d continue the game.  I remember the snow in May.  I remember the summer of ’98, when it seemed like we never lost and every day was sunny and 20 degrees.

But man, I hated that tarp.

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Calgary baseball’s long-running weather woes 

Vipers are the latest franchise to feel Mother Nature’s wrath 

By Scott Cruickshank, Calgary Herald / June 4, 2011


John Traub still worries about the weather.

Still monitors the forecasts. Still studies the radar.

Presumably, the man tiptoes through the front door of his home after breakfast with palm extended, bracing for that telltale drop of rain.

Consider it a force of habit.

Because, after a damp dozen-year run with the Calgary Cannons, Traub knows the havoc that precipitation — in any one of its nasty forms — can wreak on a ball club.

So even now — from the sunny headquarters of the Cannons’ current home in Albuquerque, N.M. — Traub remains obsessed with meteorological patterns. His preoccupation is unnecessary.

“Waking up every morning knowing that you’re going to play is a huge relief,” says Traub, general manager of the Isotopes. “But we don’t take that for granted.”

They certainly could, though.

The Isotopes, in their ninth season since relocating from Calgary, have absorbed a grand total of 11 rainouts. Some years, there is none to report.

Compare that baseball oasis to Calgary, where the Cannons’ fuse got snuffed on a regular basis.

In their final year, 2002, they were victimized by 19 rainouts. And in its 18 years at Foothills Stadium, the Pacific Coast League crew endured a whopping 155 postponements. Uncountable is the number of times the Cannons winced through horrendous conditions just to get games in.

But hostile weather in Calgary is hardly news.

Not to Russ Parker, who bankrolled more than a quarter-century of professional baseball in this city.

Not to John Conrad, who watched a week ago as his team’s home-opener in the North American League was postponed for one, then two, then three days, because of downpours.

“Boy, that is the No. 1 challenge,” Conrad, president and co-owner of the Calgary Vipers, says of Mother Nature’s foul moods. “That weather just took all of the momentum away from us. We have to roll with it. There’s going to be some days like this in Calgary, and there’s going to be some good days.”

Parker can appreciate the philosophical stance.

At the daily mercy of the elements, you accept the odds or you take your ball and go home.

Parker, at a distance now, can chuckle about what he and the Cannons — and their fans — suffered through all those days at 2255 Crowchild Trail.

“Those big thunderclouds would come in and dump on us,” he says, “then circle around the east side of the city and come back and make sure we got hit a second time. We used to laugh.

“Some nights, it was so bad.”

Take, for instance, the Cannons’ first home-opener — their Calgary debut, back in April 1985.

“The weather had been wonderful,” recalls Parker. “Then a front blew in and dumped seven or eight inches of snow, and we were snowed out for three days. It was hilarious. Because we had people coming over from all parts of the city with shovels. They knew what the situation was and that we had to get the snow off the field so the inaugural season could get underway.

“Anyway, we were able to play the fourth night. Colder than hell.”

Didn’t that, a nightmarish Game 1, raise any eyebrows?

“Nobody at that time questioned anything,” says Mark Stephen, voice of the Cannons for the first seven years. “The only question that was asked — who’s got a wheelbarrow?”

Calgary, of course, doesn’t have a monopoly on lousy weather.

During the Vipers’ game Friday in Edmonton, temperatures dipped to 4 C. Fans in some of the Major League centres shiver through every spring.

“That was the only thing that used to get under my skin,” says Stephen.”People would complain about the weather here, which was brutal, yes. But why is (4 C) in Calgary terrible but OK in Cleveland?”

It was Parker who brought pro ball to Calgary in the form of the Pioneer League — St. Louis Cardinals rookies (1977, 1978), Montreal Expos rookies (1979-84).

Those teams, too, played at Foothills Stadium, freshly gussied up with used seats from the Stampede Corral — “so we had some with arms and back rests.” An average of 2,000, in a centre of 500,000, made the regular pilgrimage to the city’s northwest.

“There was nothing up there then — it was pretty bald,” says Parker. “Anyway, that was the start.”

Eight years later, he purchased the Salt Lake City Gulls, and the PCL arrived.

“At that time, there were 26 teams in the Big Leagues, each with a Triple-A team . . . so it made Calgary one of the top 50 markets for baseball in North America — very exciting,” Stephen says. “The players that came through here, the general excitement, playing against some pretty big cities, was many steps up from Butte rolling into town.”

And if the calibre nearly matched the Major Leagues, so, too, did the schedule — meaning 144 games.

Calgarians, hardy souls, showed up — 272,322 of them for 63 dates, an average of 4,300. More seats were needed.

Parker marvels at the success.

“Certainly during the honeymoon period, we were kind of the model for the PCL,” he says. “We put up some pretty good numbers. It was a new thing. People came to the ballpark, regardless of the weather, because it was something pretty special.”

Affection eventually faltered.

Partly because of the Seattle Mariners’ decision to sever ties after 10 years, choosing to install their Triple-A affiliate in Tacoma.

Parker never fought it.

“Our perception was . . . maybe it was time for a change,” he explains, “maybe the fans would welcome a new Major League organization. Not so.”

Not so at all.

With the familiarity gone, with the novelty of Triple-A long spent, weather became the determining factor.

“I don’t know if it got worse . . . but people overlooked it in our formative years,” says Parker, whose outfit, subsequently, hooked up with the Pittsburgh Pirates (1995-97), the Chicago White Sox (1998) and the Florida Marlins (1999-2002). “They put on an extra sweater or jacket and came anyhow. It got so they wouldn’t come out early in the year anymore. The attitude was, ‘We’ll go when the weather gets better.’ Some summers, the weather never got much better.”

Nature alone didn’t spell the demise of the Cannons.

There were travel costs and immigration headaches, a limp loonie and a substandard stadium.

“You can’t completely blame it on the weather,” says Traub, “but weather’s at the top of the list.&rdquo
;

April and May were often near writeoffs. July belonged to their neighbours, the Calgary Stampeders of the Canadian Football League. Evenings got chilly by mid-August.

All of which left June.

“So really,” says Traub, “there was only one month when we weren’t up against any competition.”

Which is no one’s idea of a sterling business model.

Maybe, just maybe, Calgary itself is the problem.

Despite supporting pro franchises for more than 30 years — 2004 is the only blank — perhaps this isn’t a baseball town.

“There’s some merit to that,” says Stephen. “Once the casual fans stopped coming (to Cannons games), you relied on what I call the hardcore, nose-in-the-scorebook crowd. I’m not sure there’s enough of that . . . the hardcore baseball constituency.”

Having experienced both sides of the weather coin, Traub insists that success, at least at the Triple-A level, does depend on a favourable climate. Some cities have it. Calgary does not.

“A difficult psychological hurdle,” says Traub. “It didn’t just affect the ball club, it affects people, normal citizens. When it’s so cold that they can’t get the gardening done . . . once that first really good day comes? They’ve got to get their own things done, and baseball wasn’t at the top of the priority list.

“But when the weather co-operated, the entertainment was second to none.”

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Posted June 27, 2011 by JasonMacAskill in Uncategorized

Alberta: a great place to educate, and a great place to renovate!   Leave a comment

Holy moley,  I’m a busy dude.  BBIs with my BNI chapter members.  Getting everything ready for tax time.  Two more baseball games for the boy.  Networking functions.  Good thing it’s the longest day of the year today, right?

As promised yesterday, the other two news articles I really liked.  They both help demonstrate what’s happening in Alberta, albeit in two very different ways.  This is a good province in which to find employment, and people are more confidently spending their money.  Those are both excellent indicators for investment…right?

Just in case the respective links break, I’ve cut, pasted, and bolded the articles below.  The links to said articles are here and here.  And after you read them, and reflect upon their worth and importance – get outside and do something!

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93% of SAIT graduates secure employment: survey

Sign of economic rebound in Alberta

By Mario Toneguzzi, Calgary Herald / June 16, 2011


CALGARY — A graduate survey by SAIT Polytechnic, released Thursday, indicates another signal that better economic times are ahead for Alberta.

Based on survey results of the 2,050 graduates seeking work, 93 per cent were able to secure employment after completing their program. That’s an increase from 91 per cent last year.

The school’s highest number was 99 per cent for 2006.

Our graduates are able to take advantage of the upward trend in job opportunities as the economy strengthens because we stay relevant,” said Gordon Nixon, SAIT’s vice-president academic, adding that 1,000 business and industry partners serve on more than 60 SAIT advisory committees.

The SAIT Graduate Employment Survey polled all graduates from its credit programs in the 2009-10 academic year. Results also revealed that 83 per cent of graduates were employed in their chosen field within nine months of graduation, an increase of 12 per cent over the previous year. It’s the most significant increase year-over-year in the past 10 years.

“These findings are strong indicators of an economic recovery and SAIT’s ability to keep pace with industry’s needs,” said the school in a news release.

From apprenticeships to baccalaureate degrees, SAIT provides education to more than 70,000 registrants each year.

Seventy five per cent of the graduates remained in Calgary and just over 90 per cent stayed in Alberta.

Recently, a survey indicated Calgary-area employers expect a steady hiring climate for the third quarter of 2011 — once again raising the issue of looming worker shortages.

The latest Manpower Employment Outlook Survey indicated 22 per cent of employers plan to hire for the upcoming quarter (July to September), while four per cent are anticipating cutbacks.

Another 72 per cent of employers plan to maintain their current staffing levels.

Thomas Lukaszuk, Alberta’s minister of employment and immigration, last week renewed warnings of severe labour shortages, noting some companies are already starting to feel the crunch.

Alberta’s unemployment rate dipped to 5.4 per cent last month, down from 5.9 per cent in April, Statistics Canada reported last week.

Only Saskatchewan (five per cent) and Manitoba (5.3 per cent) reported lower May unemployment rates.

Employment increased by 8,500 in Alberta between April and May, with construction, health care, social assistance and culture and recreation leading the way.

For the past 12 months, employment grew by 2.8 per cent, or 56,300 jobs, the fastest growth rate in the country.

Unemployment in Calgary fell to 5.7 per cent in May from 5.9 per cent in April. The city’s unemployment rate in May 2010 was 7.6 per cent.

 

Alberta renovation spending to lead country

1.7% growth in 2011, 4.9% in 2012

By Mario Toneguzzi / June 18, 2011


CALGARY — Renovation spending in Alberta is forecast to lead the country in year-over-year growth this year and in 2012, according to a report by the Altus Group, an economic consulting firm.

The report said spending in Alberta on renovations hit $5.7 billion in 2010, which accounted for 9.5 per cent of all spending in the country. Total spending in the province was up 7.2 per cent from the previous year which was behind many other provinces for annual growth.

Canada saw 9.2 per cent growth in 2010 to $60.1 billion.

Altus Group forecasts spending to increase in Alberta by 1.7 per cent this year and by 4.9 per cent next year — both growth rates leading the nation.

For Canada, the report forecasts a 0.1 per cent decline this year followed by a 3.6 per cent hike in 2012.

Canada’s general economic recovery continues, but at a modest pace,” said the report. “Job growth has been stronger through the recovery than after the last recession, but still suffers from weakness, particularly in terms of youth and full-time jobs. The cautiously optimistic forecast for economic growth translates into equal caution over the forecast for renovation demand.

“The good news for renovators is that weaker than expected economic growth has extended the period of very low interest rates, perhaps into 2012. Low interest rates are important for this sector both in terms of affordability for those who need to borrow to finance their renovations, as well as in keeping mortgage payments in check, thereby freeing up income for discretionary renovation spending.”

The report said that last year one in three homeowners took advantage of the Homeowner Renovation Tax Credit getting back an average of $700.

Improvements accounted for about three out of every four renovation dollars in 2010, with repairs the remainder.

Research conducted by Altus Group for the Canadian Real Estate Association found that the average MLS transaction in Canada generates about $9,400 in incremental renovation and repair spending within three years of the purchase.

According to the Calgary Real Estate Board, year-to-date up to the end of May, single-family MLS sales of 5,835 units were up 0.67 per cent compared with the same period a year ago but condo sales were down 10.84 per cent to 2,386 units.

Sano Stante, CREB president, said there will be a gradual shift to more of a seller’s market as the inventory of homes for sale diminishes in the second half of this year.

“I think we’re going to see continued confidence in the economy and the real estate market,” he said. “And as we begin to see more in-migration towards the end of the year, that’s going to be realized in increased sales in the real estate market.

Robert Kavcic, an economist with BMO Capital Markets who joined Stante in a real estate panel discussion in Calgary on Friday, said the city’s real estate market outlook is positive relative to other major centres across the country.

“Valuations relative to income have actually already come down quite a bit from 2007. Prices are still five per cent below peak levels,” said Kavcic, adding Calgary is cheaper in comparison to other markets like Toronto and Vancouver when looking at the housing price in relation to income.

“The other factor is that we’re expecting much stronger economic growth in Alberta versus Canada as a whole and that’s going to drive in-migration flows again and demand for housing.”

Posted June 21, 2011 by JasonMacAskill in Uncategorized

Alberta is poised for a supercycle of growth. Here’s why.   Leave a comment

So I didn’t get back to you over the weekend as promised.  My apologies, the last two days were pretty darn busy.

I discovered three more articles I really liked last week that gave me even greater satisfaction knowing I’ve personally invested in Alberta.  On Friday, I said I was going to tell you about all three.  However, based on the length of the first one I liked, I’ve decided to just feature it by itself, and I’ll showcase the other two tomorrow.

Quite simply put, things are a-happenin’ out here.  Judge for yourself, though – read the article.  Here’s the link to the story, courtesy of the Calgary Herald, and if you see bold text, I’ve done the bolding.

If you’re ready to do some reading, then let’s go…

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Just don’t call it a boom: Alberta poised for growth supercycle

By Gary Lamphier, Postmedia News / June 17, 2011

 
EDMONTON — Two years after the Great Recession ended, Alberta’s energy-fuelled economy is again flexing its muscles. 
With oil prices tripling from their 2009 lows, drilling activity on the upswing, unemployment falling and oilsands investment surging, Alberta looks poised for a new growth supercycle.

In fact, compared with the beleaguered U.S., the debt-ridden economies of Europe or the sluggish growth in Ontario and Quebec, Canada’s energy superpower looks like a rising star once again.

Just don’t call this new growth cycle a boom, at least not yet. There are still nagging patches of weakness and some serious challenges ahead, both from within and beyond Alberta’s borders. To wit: The U.S. recovery remains fragile, China’s supercharged economy is slowing, and the 27-month-old bull market in equities looks as if it may be running out of gas.

Moreover, the province continues to run large budget deficits; natural gas prices remain abysmally low; lumber prices are in the ditch; housing starts and house prices are flat; and interprovincial migration, which peaked in 2006, is just starting to rebound.

“Boom would probably be an appropriate term if there weren’t all these clouds on the economic horizon,” says Craig Wright, chief economist at RBC Capital Markets

“Last year the story was continued upward revisions to global growth. Now that story has run its course, and we’re starting to see many central banks in emerging economies putting the brakes on,” says Wright, who expects Alberta to lead the country in growth in 2011.

“There is a risk they’ll go too far and we’ll see a sharper slowdown than we’re expecting, so global growth could come down and then you’d see some fallout in commodity markets, which would take some of the boom out of the boom.”

Those aren’t the only worries. The oilsands also face stiff opposition from the green lobby and some members of Congress, who hope to slow further mine expansion and derail plans for pipelines that would carry bitumen to the Gulf Coast and Canada’s West Coast.

Without this new capacity, billions of dollars of future investment, tax and royalty revenues could be at risk, and Alberta’s oil riches might never reach China or other fast-growing Asian markets. Economic threats aside, the B-word has also become something of a toxic term for many Albertans.

With memories of the savage 2008-2009 downturn still fresh, and dreams of a burgeoning Upgrader Alley east of Edmonton sharply scaled back, the current mood is less ebullient and more realistic than it was in 2007.

Besides, few want to see a repeat of the chronic labour and material shortages, huge cost overruns and frenzied speculation that accompanied the last peak.

“It’s a quiet boom, not a sonic boom. People are scared to call it a boom because of what happened in 2007, with the way it almost imploded on itself,” says Neil Shelly, executive director of Alberta’s Industrial Heartland Association.

“But upstream in Fort McMurray, if it is not a boom there I don’t know what you would call it. They have a lot of projects in the pipeline that are already approved.”

A staggering $180 billion will be spent on new oilsands projects over the next decade, according to a recent forecast by Peters & Co., with annual spending expected to peak at $22 billion by 2014.

Even those lofty figures fail to reflect the whole story. Annual spending on oilsands operations and maintenance now exceeds new capital investment, pushing the total current outlay to more than $30 billion a year.

That will only grow in the years ahead, according to a report by the Canadian Energy Research Institute (CERI). It estimates total oilsands investment at nearly $2.1 trillion over the next 25 years, as global demand for crude ramps up.

Using a “realistic scenario,” CERI estimates that oilsands output will reach 2.1 million barrels per day (b/d) by 2015 and 4.8 million b/d by 2030, up from about 1.7 million b/d currently.

Demand for natural gas — used to heat and extract the bitumen — is also expected to soar, along with employment levels and provincial royalties.

The number of direct and indirect oilsands jobs will top 900,000 by 2035, CERI estimates, up from just 75,000 in 2010, and oilsands royalties alone are expected to reach $15.5 billion by 2019. That would top the record $14.3 billion in total resource revenues Alberta generated in 2006-07.

Still, most Alberta business executives, economists and policy-makers hope the next decade brings a prolonged period of more modest but sustainable growth, where the excesses of the past are kept in check.

Think of it as the Great Expansion, if you will. That may not sound as sexy as the word boom. But if Alberta’s energy giants and the province’s political leaders can better manage the stresses that come with growth, the coming decade should bring unprecedented prosperity.

“Alberta’s economy is doing quite well, and we’re in a very enviable spot if you look at the G8 countries or many regions in the U.S. It’s hard to find a place right now that’s actually doing better than Alberta or Western Canada in general,” says Todd Hirsch, ATB Financial’s senior economist.

With economic growth of four per cent in 2010, Alberta led all provinces except Newfoundland, a province whose economy is 90 per cent smaller than Alberta’s. Most forecasters expect the uptrend to continue.

“Natural gas prices are still an enormous challenge, but there are a lot of other strong points that compensate for that. Anything to do with oil, whether it’s conventional drilling, oilfield services or oilsands, is powering the provincial economy ahead,” says Hirsch.

That upbeat view is widely shared by economists at Canada’s major banks and the Conference Board of Canada. Most expect Alberta and Saskatchewan to battle for top spot among Canada’s provinces in 2011 and 2012, along with Newfoundland.

The Conference Board sees Alberta’s GDP (gross domestic product) expanding by 3.1 per cent this year and four per cent in 2012. Only Saskatchewan is expected to post stronger numbers percentage-wise, with growth pegged at 4.2 per cent both years.

RBC Economics and BMO Capital Research see somewhat stronger growth for Alberta this year, at 4.3 per cent and 3.6 per cent, respectively, with growth decelerating a bit in 2012.

BMO expects that Alberta, after trailing Saskatchewan and Newfoundland this year, will lead the provincial rankings in 2012, while RBC ranks the province No. 2, behind Saskatchewan.

Alberta’s eastern neighbour, with an economy a quarter that of Wild Rose Country, is riding a boom in potash and other agricultural products as well as oil.

“I try not to get too caught up in pinpointing the growth rate, but I think in general Alberta is going to be near or at the top of the provincial rankings in growth and Western Canada, led by Alberta, will continue to be the epicentre of growth in this country,” says Hirsch.

That said, the growth won’t be spread evenly. Right now, growth is stronger in the northern and eastern halves of the province, he says, and weaker in the south and in the foothills of the Rockies.

“As you move north, attitudes and economic conditions generally improve. In Lethbridge and Medicine Hat they’re good. When you get to Calgary it’s better. And in the Red Deer-Nisku-Edmonton corridor, it’s better again,” says Hirsch.

“By the time you get to Fort McMurray it’s ecstatic. Fort McMurray’s economy is exactly where it was before the downturn started three years ago. They’ve fully recovered and they’re already facing labour shortages.”

The upward momentum is spreading to other sectors too, such as manufacturing. The total value of factory goods shipped in March topped $5.7 billion, up nearly 18 per cent versus a year earlier.

“We’ve got (order) backlogs in all of our operations now. Rather than spending our time trying to cut costs,we’re spending our time trying to find people,” says Jim Rakievich, chief executive of McCoy Corp., an Edmonton-based energy equipment manufacturer.

“In Edmonton we’re looking for 15 to 20 people right now, both skilled and unskilled, for our manufacturing and general operations, and they’re hard to find.”

That’s a familiar story. Dozens of companies are already feeling the labour pinch. One firm alone —construction giant Ledcor Industries — hopes to hire 9,000 new workers in 2011.

With Alberta’s unemployment rate down to 5.4 per cent from a peak of 7.5 per cent in the spring of 2010, the battle for talent is already at a fever pitch.

Retail sales are also up sharply this year, with the March tally of $5.2 billion just below the record high set in June 2008. ATB economist Dan Sumner expects retail sales to hit new highs in the months ahead.

Cattle prices and beef exports are also rebounding sharply, as the province’s agricultural sector recovers from the recession.

On the wage front, Alberta continues to lead Canada’s provinces by a wide margin. According to the latest data from Statistics Canada, average weekly earnings in Alberta topped $1,037 in March, up 5.8 per cent over the previous 12 months, and more than 18 per cent above the Canadian average of $876.

With average house prices in Alberta essentially flat over the past three years, Calgary and Edmonton now rank among the most affordable major metro markets in Canada, according to a recent survey by RBC Economics.

It costs a staggering 72.1 per cent of total average pre-tax household income to carry a mortgage on a typical detached bungalow in Vancouver, and 47.5 per cent in Toronto, RBC says. In Calgary, the comparable figure is 35.9 per cent; in Edmonton, it’s a mere 31.5 per cent.

That’s a key reason why economists expect interprovincial migration to rebound sharply. As job growth and wage gains continue to edge up, that will boost new housing demand.

One top Edmonton-based residential developer says his firm expects a 50 per cent jump in annual revenues by 2012. To meet that, the firm aims to increase its staff count by at least a third.

“I see Alberta on the cusp of what I hope doesn’t turn out to be another out-of-control boom, like the conditions we saw in 2006 or 2007,” says ATB’s Hirsch.

“That led to all kinds of imbalances, especially in the labour market and the housing market. So I’m hoping we’re not going back there. But I do see momentum in the province picking up gradually through 2011, 2012 and 2013, driven by oil prices and an eventual recovery in natural gas prices.”

Instead of the torrid six to seven per cent GDP growth rates the province experienced at the height of the last boom, Hirsch say, he’d rather see “nice, moderate” growth of three to four per cent annually.

“Faster is not always better when it comes to GDP growth. We tend to think it is and we’ve led people, especially politicians, to think faster is better. But faster is not better,” he says.

“Even China and the emerging economies are finding that out. You don’t want your economy growing at 10 per cent a year (like China). You need to rein it in, or it’s going to end badly.”

The same goes for oil prices, he warns. If prices reach $120 U.S. a barrel or more once again, that could derail the global recovery — and with it, hopes for a new era of sustained growth in Alberta.

“When you see oil prices spiking by $2, $3 or $5 a day, that’s not a situation Alberta wants to be in because it’s not driven by (market) fundamentals, it’s being driven by speculators,” he says.

“It’s like pulling on an elastic band. The harder you pull on that band, when it eventually gives, the reaction is going to be a lot more violent. So that’s why I would prefer to see oil prices fluctuate around $80 to $90, not too far away from that fundamental supply-demand price. That’s a nice healthy level that would really support Alberta’s economy.”

Posted June 20, 2011 by JasonMacAskill in Uncategorized

Red Deer: one of the 25 best places for business… and more!   Leave a comment

I saw several news articles I wanted to discuss today – so many, in fact, that I’m going to do two different posts. One today (ta-dah!), and if I can squeeze it in during a very busy weekend, the other tomorrow or Sunday.  To maintain a theme, today’s post will feature the two articles I spotted in the Red Deer Advocate… and as is often the case when I feature these articles, it’s because good things are happening there.

Like the subject line says, Red Deer is indeed one of the best communities for business in western Canada.  Several points were made in its favor, and I will put them in bold.  The other article I’m featuring discusses a neighborhood under development in southeast Red Deer, not that far from where Belterra is syndicating its most recent project… ergo its inclusion.

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Great places for business

By Advocate staff / June 14,2011

Red Deer and Olds have earned some ink in Alberta Venture magazine.

The two municipalities are profiled in the business magazine’s June edition, thanks to their inclusion on a list of the 25 best communities for business in Western Canada.

Red Deer is cited as one of the best places for small business, while Olds is recognized for its information technology and high-tech services.

The magazine points to Red Deer’s desirable location in the Calgary-Edmonton corridor, and the important role it plays in providing information technology, equipment fabrication, oil service technologies and transportation services to Alberta’s oil and gas sectors.

“Because these areas of activity are largely made up of small firms, Red Deer has one of the highest numbers of small businesses per capita in the entire country.”

Alberta Venture praises the city for implementing the BizPal system to reduce red tape for businesses, and for creating bylaws that make it easier to set up home-based businesses.

It also gave a thumbs-up for the collaborative work of Red Deer Regional Economic Development and Central Alberta Economic Partnership in seeking to attract foreign direct investment in the manufacturing, transportation, logistics and agri-food sectors.

Red Deer’s median household income of $100,986 was second only to Wood Buffalo’s $177,634. And the city ranked sixth in 2001-2010 population growth (32 per cent), and seventh for the cost of services land ($300,000 per acre).

In the case of Olds, Alberta Venture was impressed with the efforts of the Olds Institute for Community & Regional Development in pushing for fibre-optic broadband connectivity to every household and business in the area. The OICRD was also mentioned favourably for its development of Mountain View Power, which devotes its profits to sustainable community economic development.

The $68-million Community Learning Campus being developed by the town, Mountain View County, Chinook’s Edge School Division, Olds College and other partners also attracted an approving nod, as did the high-tech learning incubator at Olds College.

Alberta Venture based its top-25 listing on information submitted by 43 communities.

It declared Medicine Hat the best community for business in Western Canada. Low taxes, inexpensive industrial land costs and office lease rates, and the city’s proximity to booming Saskatchewan were among the reasons given for this decision.

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Planners approve smallest lots

By Advocate staff / June 15, 2011

One of Red Deer’s newest neighbourhoods will also have its smallest lots.

On Wednesday, Red Deer’s muncipal planning commission approved the subdivision of 39.3 acres of undeveloped land in Phase 1 of the Lancaster/Vanier East Neighbourhood Area Structure Plan — which is located south of Lancaster and east of Vanier Woods. The plan will result in the creation of 120 residential lots, including 39 zoned R1G.

Last month, city council voted to adopt the R1G zoning on a pilot basis in the southeast Red Deer subdivision.

R1G lots are similar to the city’s existing narrow residential lots, but are required to have an attached two-car front garage and a minimum depth of 30 metres — 6.6 metres less ­than the narrow lots.

They are common in Edmonton and Calgary but weren’t previously allowed in Red Deer.

Council voted to allow the creation of 162 R1G lots in the new Lancaster/Vanier East subdivision, with these to be evaluated before more are permitted in future subdivisions.

Municipal planning commission member Doug Janssen and Councillor Frank Wong expressed misgivings about the R1G zoning during Wednesday’s commission meeting.

“I have great concerns with the R1G count,” said Janssen, explaining that concrete could end up dominating the area.

However, Mayor Morris Flewwelling pointed out that the issue of R1G lots in the subdivision had already been addressed by council.

The commission was dealing with the subdivision application, he said.

Janssen also voiced concerns about congestion on the main road leading into a dense cluster of approximately 79 lots in the first phase of the subdivision.

The subdivision plan was presented on behalf of Melcor Developments Ltd. The remaining residential lots are zoned for low-density development, with four lots for a potential social care facility and a site for a place of worship also contemplated.

Posted June 17, 2011 by JasonMacAskill in Uncategorized

And now, a little something about the Red Deer entrepreneurial spirit…   Leave a comment

I just posted an article about the apartment crunch in Red Deer – it was supposed to go up Monday, but technical issues arose, dammit.  Sorry for the delay, folks.

So here’s another article about that growing metropolis in central Alberta, but this time, it discusses one of many start-up businesses cropping up there.  How do I know that Red Deer is such an entrepreneurial city?  Well, check out this article, if you like, where it ranked seventh out of 100 Canadian cities amongst those with populations exceeding 100,000 people.  It’s not just the oil and gas driving things up there… though it’s relatively important, it’s just as important to diversify.

This article describes the local efforts to get into the online group coupon market.  I’m a “member” of one of these groups, and have purchased a couple of the coupons offered to me on a daily basis.  (And I would be remiss if I didn”t mention a brand new entry into the Calgary market, recently founded by someone I’ve known for over a decade now: yummymummysaver.com, beginning later this month.)  DealSpend caters to the local Red Deer market.  This is their story, and any bolding below is mine.

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DealSpend launches in Red Deer

By Harley Richards, Red Deer Advocate / June 14, 2011

Online group coupons aren’t new to Alberta, with services like Groupon, LivingSocial, Dealfind and TeamBuy vying for business in Calgary and Edmonton.

But Jasper Collins and his partners saw an opportunity in Red Deer, and chose the city as the place to launch their entry into the social media advertising market. The result is DealSpend.

Launched May 31, DealSpend offers limited time discounts on local products and services. On Tuesday, it was pitching $150 worth of CrossFit training at a Red Deer fitness club for $27.

Prior to that, its online deals included deep discounts at a consignment shop for children’s merchandise, for pizza, for tanning and for yoga classes.

Offers are available for a limited time, usually 24 hours, and can be purchased online. Prices are up to 90 per cent lower than the regular cost.

“What it does is offer retailers, or any businesses, the opportunity to showcase their business without having to incur up-front costs in advertising that don’t always pay dividends,” said Jasper Collins, one of the seven founders of DealSpend.

The purpose of online group coupons is to encourage consumers to visit participating businesses, enticed by a discounted products or services. Once there, they’re likely to spend more than the coupon amount, noted Collins.

“They typically tend to overspend anywhere from 30 to 60 per cent of the original voucher.”

Plus, he added, the businesses are able to showcase themselves, and hopefully generate repeat business and referrals.

Collins expects DealSpend to attract dozens of buyers for every deal it posts, and a guaranteed level of exposure for its business clients.

“We want to be able to offer a business owner a kick at having a hundred new people trying out their service.”

DealSpend has a sales director in Red Deer — George Atkey — but most of its partners live in Calgary, said Collins, with one a Vancouver resident. Their backgrounds include advertising and information technology, and they’ve been working on DealSpend since last year.

The decision to launch the venture in Red Deer was motivated by the city’s central location, the lack of competition here and low local marketing costs relative to bigger centres like Calgary of Edmonton, said Collins. Plus, he added, the local demographics are favourable.

“It’s a very young market in Red Deer, so there are a lot of Internet users.

“I think the potential for Red Deer is great.”

Collins and his partners are eyeing other markets, with the electronic infrastructure they’ve built easily expandable and transferable.

“The platform that we have, we could branch out to Calgary, Edmonton, we could do Vancouver, we could go the States,” said Collins.

He added that DealSpend should be able to distinguish itself from other online group coupon services through the support it provides its business clients. This includes information about consumer buying habits.

Online group coupon services receive a percentage of the sales they facilitate. Consumers pay for product vouchers or coupons online via PayPal or credit card, and in the case of DealSpend receive a $5 credit for every person they refer to the site.

DealSpend’s website is located at www.DealSpend.com, and it also has a Facebook page and a Twitter account.

Posted June 15, 2011 by JasonMacAskill in Uncategorized

The "No Vacancy" signs are starting to come back out   Leave a comment

Are they springing up en masse?  Well, not exactly, but in several Alberta cities, apartment vacancy rates are dropping.  Why?  Increased employment, international migration, and an improving economy.  Great news if you plan on investing in the real estate market specifically, or Alberta in general.  But, hey, don’t take MY word for it… courtesy of the Red Deer Advocate, any bolding courtesy of me.  The article below has tracked vacancy trends not only in Red Deer (a market I’m very interested in), but other cities in the province.  Here you go:

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Vacancy rates drop
By Advocate staff / June 10, 2011 7:08 AM

The strengthening provincial economy is pushing apartment vacancy rates downward in Red Deer and other Alberta cities, a Canada Mortgage and Housing Corp. report concludes.

CMHC’s April 2011 rental market survey, the results of which were released on Thursday, found that average vacancy rates in Red Deer dropped 2.3 percentage points from a year earlier. The figure, for apartments of all sizes, went from 8.7 to 6.4 per cent. 

The decline was most pronounced in the case of one-bedroom units, with the average vacancy rate in Red Deer dropping from 8.7 to 4.2 per cent.

The year-over-year decrease for two-bedroom apartments was 1.4 percentage points, declining to 7.9 per cent; and among three-bedroom suites the vacancy rate went from 5.5 to 3.8 per cent.

The trend was similar in other major Alberta cities.

The overall April vacancy rate in Grande Prairie tumbled from 14 per cent in 2010 to 5.5 per cent this year, in the Regional Municipality of Wood Buffalo the number slid from 13.2 to 6.2 per cent, in the Calgary metropolitan area the rate went from 5.3 to 3.4 per cent, in Medicine Hat the change was from 10.7 to 9.4 per cent, and in the Edmonton metropolitan area the number went from 5.2 to 4.7 per cent.

The year-over-year April vacancy rate for apartments in Lethbridge actually increased, going from 5.8 to 6.4 per cent.

“The reduction in vacancy is largely attributed to increased employment levels and recent gains in international migration,” said CMHC regional economist Lai Sing Louie in a news release.

The high price of oil was a key factor, said the release, pointing to Grande Prairie and Wood Buffalo as communities where increased drilling and oilsands activity have affected demand for rental accommodation.

Conversely, it added, Medicine Hat — where lower-priced natural gas is more prevalent — had the highest vacancy rate.

Among other Alberta communities with populations of more than 10,000, Sylvan Lake posted the highest April vacancy rate, at 22.1 per cent.

But this was skewed by a 27 per cent rate in the two-bedroom category, with one- and three-bedroom vacancy rates both coming in at zero.

Lacombe’s overall vacancy rate was also high, at 11.7 per cent. CMHC based that figure on a one-bedroom vacancy rate of 3.1 per cent, 15.9 per cent in the case of two-bedroom units and zero vacancy when it came to three bedrooms or bigger.

The drop in Red Deer’s vacancy rates didn’t result in higher rents, according to the CMHC survey.

The average overall rate in the city actually declined from April 2010 to April 2011, going from $787 to $767. In the case of bachelor suites, the average rent went from $595 to $584, one-bedroom units slipped from $708 to $702, the decrease for two-bedroom suites was from $840 to $820, and for apartments with three or more bedrooms the average rent fell from $946 to $912.

Among Alberta’s other biggest cities, the average April price for a two-bedroom apartment declined from $1,082 to 1,040 in the Calgary metropolitan area but increased from $994 to $1,029 in the Edmonton metropolitan area. It went from $851 to $866 in Grande Prairie, $843 to $859 in Lethbridge, $682 to $692 in Medicine Hat, and $2,060 to $2,152 in Wood Buffalo.

In Sylvan Lake, the average two-bedroom apartment rent jumped from $692 to $819 from April 2010 to April 2011, and in Lacombe the average during the same period went from $745 to $755. 

The average same-sample rent increase for a two-bedroom apartment in Alberta’s urban centres was less than one per cent, noted CMHC.

CMHC’s rental market survey is conducted every April and October.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Posted June 15, 2011 by JasonMacAskill in Uncategorized

The Kid   Leave a comment

He’s the reason that baseball is my favorite sport.

He’s the reason that the Montreal Expos were, and I suppose still are, my favorite team.  When I played ball as a kid/teenager, I played his position for a couple of years.  When he was traded from the Expos to the New York Mets on December 10, 1984 (yes, I still remember the date), I was shocked beyond words.

When the Mets won the World Series in 1986, I was ecstatic that after a decade in the bigs, after suffering through so many frustratingly close finishes in Montreal, he finally earned a well-deserved championship ring.  I was just as happy that he ended his career with the Expos in 1992, and the final hit he recorded drove in the only run scored that day.

I always said he’d be the one player I’d make the trek to Coooperstown for in order to see his induction into the Hall of Fame.  After too many tries for my liking, he made it in 2003.  Luckily for me, circumstances swirled together to make such a trip possible, enabling me to see him honored that day.  He is one of the greatest catchers of all time.

So imagine my sadness when it was reported a couple of weeks ago that Gary Carter was diagnosed with inoperable Stage 4 glioblastoma.  Initially, an MRI spotted four small tumors in his brain, and after further testing, it was confirmed that he has glioblastoma, a form of cancer that affects the brain and nervous system.  He has begun radiation treatment, but as you can well imagine, he has a tough fight on his hands.

From one of your many fans, thank you, good luck and keep fighting.

Carter2Carter1

Posted June 10, 2011 by JasonMacAskill in Uncategorized

The numbers are in… and Red Deer is bigger!   Leave a comment

Belterra Land Company is in the process of syndicating approximately 80 acres of raw land in Red Deer.  Investors are adding undivided interests of land to their portfolios – and I’m one of them – while Belterra and their people do various pre-development studies for the purposes of maximizing the value of the land.  At some point in time – three, five, eight, ten, or a number I did not name – they will exit out of the Red Deer project, and distribute the proceeds of the exit (sale) equally to those investors.  Did I mention I’m one of them?

Obviously, one of the market indicators that may help enhance the value of that land is population growth.  When the population expands, there is an increased demand for housing – makes sense, right?  If houses or condos or apartments are on the market, they will probably get sold a tad quicker.  If the demand outweighs the supply, then NEW houses get built to meet this demand.  Simple stuff.

…So I saw this article today in the Red Deer Advocate today.  The census numbers are out, and Red Deer did, in fact, grow in 2011.  Nothing like the boom that occurred about a decade ago, but on the other hand, simple, steady growth is pretty important to me, too.  There are various economic trends that suggest that this growth is just the beginning as well.  Read it for yourself – any bolding is mine – and draw your own conclusions.

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Young and connected, city grows to 91,877

Laura Tester, Red Deer Advocate / June 9, 2011

Red Deer’s official head count now stands at 91,877, thanks to a two per cent population boost.

As well, in a city where the average age is 33, almost two-thirds of households use social media such as Facebook.

On Wednesday, the City of Red Deer released its census numbers for 2011, showing that Alberta’s third largest city had grown by 1,793 residents.

The increase shows a change from 2010, when a 0.215 per cent increase was recorded, bringing the number to 90,084 people.

Red Deer Chamber of Commerce president Bruce Schollie said he was “quite pleased” to hear that Red Deer saw some population growth because it’s a good economic indicator.

The increase is really spot on in terms of what we’ve been experiencing economically,” said Schollie on Wednesday.

During economic boom times several years ago, Red Deer was seeing population growth of four to five per cent, he added.

In 2006, Red Deer had a population of 82,772 living in 33,894 dwellings, a 22 per cent increase from 2001.

“When things slowed down and we had the economic recession, we practically didn’t see any growth,” Schollie said.

“Now, we’re seeing moderate growth, not gangbusters (growth).”

The strongest growth occurred on Red Deer’s south end, with 348 new residents in Lancaster and 269 new residents in Sunnybrook South. Glendale saw a decline of 104 residents while the Riverside Meadows neighbourhood dropped by 135 residents — both of which may be attributed to residents relocating or that children in those older areas may have grown up and left home.

The average age of people living in Red Deer is 33 and the male-female percentages are split almost evenly.

Census workers tallied that 21,348 households out of 39,000 used social media including Facebook, Twitter and My Space.

“We asked the social networking question to find out how residents are using the web and the responses will help us tailor our website and communications to better meet our citizen’s needs,” said Julia Harvie-Shemko, communications manager.

The municipal census information helps the city with future planning of residents’ needs, school locations and parks. The numbers also help with gaining provincial grants.

The complete 2011 census report is expected to be released by mid-June.

Posted June 9, 2011 by JasonMacAskill in Uncategorized

Is Calgary booming again?   Leave a comment

Greetings, one and all.  It’s a gloomy Monday, but a friend at the office forwarded me an article last week that’s sure to pick up your spirits today.  Especially if you live here in Calgary.  Or Alberta.  Or if you have a vested interest in either.

The Calgary Herald asks if Calgary is “booming” again.  Here is the link to the article; I’ve pasted it below, and bolded some of the text.  Based on the material presented in the story, I’d say the question seems to be rhetorical…

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Is Calgary’s boom back?

Consumer confidence seen climbing ‘with a vengeance’ 

By Eva Ferguson, Calgary Herald / June 3, 2011


CALGARY – From BMWs to Bentleys to a good bottle of wine, Calgary consumers are opening their wallets in what’s being described as more than just a recovering economy – with some even willing to say the word “boom” again.

Retailer Wayne Henuset is in the thick of it, discovering his own barometer to measure what is quickly turning into a healthier marketplace.

The owner of Willow Park Wines and Spirits says consumer confidence has been rising “with a vengeance” since fall.

“We know this because when things are bad, people just buy wine, on sale, and bring it home.

“But when times are good, the restaurants are buying more wine from us, because people are going out more. And that’s what’s happening.”

It’s one of myriad examples that suggest Calgary is reclaiming its economic swagger, as sectors across the board enjoy a surge in consumer and investment confidence, including high-end retail, real estate, construction and, most importantly, oil and gas.

Henuset adds that during the 2008-09 recession, reduced prices and spot sales were what brought customers in.

“Now they’re not really paying attention to that as much, they’re just buying whenever,” Henuset said, adding that the pricier, highend bottles are also getting bought up more.

According to the BMO Blue Book report released this week, Alberta is expected to lead the country in real GDP growth by next year as the province’s economy starts humming again.

Real GDP is expected to expand 3.6 per cent this year before moderating to 3.4 per cent by 2012, according to BMO Capital Markets.

In Calgary, recent reports have suggested record leasing activity in the downtown office market last year, with experts saying job growth isn’t far behind.

Meanwhile, job growth has already started in the construction industry with construction giant Ledcor launching a massive recruitment campaign, with plans to hire up to 9,000 people this year in Alberta and other parts of Western Canada.

In the energy sector, industry activity is way up, says oil and gas analyst Peter Linder, with drilling activity significantly on the rise, record land sales and job prospects improving.

Alberta Energy reported this week it had sold oil and gas leases or licences on 271,000 hectares of land worth $842 million, including a whopping $107 million for a 7,900-hectare licence near Red Deer.

“All of that means more activity in the energy industry, and that means much more jobs,” said Linder.

“In fact, I think we’re on the cusp of another significant labour shortage, another boom.”

Even the lower natural gas prices that have been a hurdle in recent years will start to recover, Linder predicts.

“The second half of this year will be far, far better than the last three years.”

Ben Brunnen, chief economist with the Calgary Chamber of Commerce, explains that as oil prices recover, Calgary’s oil and gas sector is enjoying increased activity and investment confidence.

As of March 2011, 59 oilsands projects valued at nearly $100 billion were either planned or already underway in Alberta.

“And when investment is good, incomes increase here. That’s a unique perspective for Calgary because we are the head office of oil and gas,” Brunnen said.

Businesses seem to already be reaping the rewards of more disposable income.

Justin Havre, a realtor with CIR Realty, says Calgary’s real estate market is bouncing back, particularly in the luxury home market with 44 homes sold for over $1 million in Calgary alone last month.

“The luxury market is becoming really active, and it’s usually a good indicator that there’s some confidence in our economy and in Calgary investment.”

Tony Dilawri, who runs several car dealerships including Calgary BMW and the Distinctive Collection, which sells Bentleys and Aston Martins, says the luxury car market has also improved from last year.

“We’re finding consumer confidence is definitely up as people become a little more willing to spend money on their vehicles.”

BMW sales are up 20 per cent from last year, Dilawri said, adding that some 20 new and pre-owned Bentleys and Aston Martins were delivered to customers last month. Dilawri says the Calgary kind of wealth is on its way back, a swagger that’s proud, but not too boastful. Calgary is not like Montreal and Toronto, he said, filled with old money that isn’t always affected by economic shifts.

“We’re young in Alberta, and we work hard for our wealth,” he said.

“So when we get it back, we want to have some fun. We don’t want to boast, but we want to reward ourselves.”

Brunnen agreed Calgary’s economy is bouncing back, but consumers are still cautious.

“The investment is there, and the consumer confidence will come with it.”

While optimism is growing in Calgary, however, the economic mood elsewhere is guarded. Reuters reported last week the global economy is still in flux, with investors wary that the real stresses still lie ahead. European debt uncertainties and the arrest of the head of the International Monetary Fund mixed with Arab revolt and Japan’s recovery from natural disaster are all contributors.

“It is clear that some investors have decided that they need to take some risk off the table, but they do not want to take too much off,” said Andrew Milligan, head of global strategy at Standard Life Investments.

Calgary_boom

Posted June 6, 2011 by JasonMacAskill in Uncategorized

The oilpatch is busy, and Albertans are hard at work   Leave a comment

I don’t want to tempt fate again and have my blog disappear each and every time I try to upload it.  Thus, I’ll keep my usual banter to a minimum.  Below are links to two stories (any bolding in the articles was put there by me).  Business is picking back up in the oilpatch, and if you work, live, or invest in it, things are full speed ahead.

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Drilling activity expected to rise in Western Canada

Trinidad notes buoyant Q1, industry forecast bumped

 

By DAN HEALING, Calgary Herald / June 1, 2011


CALGARY — Drilling activity is up and expected to continue to rise, according to reports Wednesday from the third-largest drilling contractor in Canada and an industry group.

Trinidad Drilling Ltd. followed in the footsteps of other Calgary-based service companies in reporting multi-year record high levels of activity in the first quarter.

It noted net earnings of $16 million in the first three months of 2011, up from a $1-million loss in the same period of 2010, while revenue jumped 27 per cent to $216 million and gross margin advanced by 23.5 per cent.

“To date, 2011 has exceeded our expectations,” said president and chief executive Lyle Whitmarsh on a conference call.

“Our outlook for 2011 is very promising as strengthening industry conditions are expected to continue and lead to further improvements in day rates, activity levels and future growth possibilities for Trinidad.”

The financial results end a buoyant reporting season for the sector with the top two drilling companies, Precision Drilling Corp. and Ensign Energy Services Inc., both earlier reporting 41 per cent-plus increases in revenue and stronger net income.

Also Wednesday, the Canadian Association of Oilwell Drilling Contractors revised its activity forecast for 2011 strongly upwards, forecasting an average rig fleet utilization rate in Western Canada of 54 per cent, equating to 433 rigs.

It noted that first-quarter rig utilization was 68 per cent in Western Canada, 11 per cent higher than its October forecast. The industry ran an average of 534 drilling rigs, up from the anticipated 480.

In Alberta, utilization averaged 67 per cent (385 rigs running out of 571); in Saskatchewan, 71 per cent (78 rigs out of 109); in British Columbia, 64 per cent (56 out of 88); in Manitoba, 77 per cent (14 out of 18 rigs) and in the Northwest Territories, 50 per cent, or 1 of 2 rigs at work.

“It’s three things, good commodity prices, the favourable fiscal regime across Western Canada and good geology,” said Don Herring, president of the CAODC.

He added the industry would have had even stronger results in the first quarter but labour shortages prevented companies from working flat out, with some rigs having to take downtime to give their staff a break. About 40,000 people are employed in the field, he said.

On the conference call, Trinidad chief financial officer Brent Conway said business was so good in both Canada and the United States in the first quarter that it was recertifying long-idled rigs to bolster its active drilling fleet.

“Our total operating days in the quarter hit a record high of over 8,500 days and day rates for each category of rig are increasing,” he said

We averaged 80 per cent utilization in the U.S. and international division and in the Canadian division … a level not seen in the U.S. since 2008 and since 2006 in Canada.”

Whitmarsh added that labour costs have increased but the company has been able to pass on those costs to customers.

The company announced recently it had signed long-term contracts or renewals for 24 rigs; about 30 per cent of the company’s Canadian fleet of 55 rigs are under contract and about 75 per cent of its 63 U.S. and international rigs, he added.

Demand increases have come mainly from oil and natural gas liquids plays, as natural gas drilling remains low because of poor prices.

 

Drilling rights fetch record $842M for Alberta

Central Alberta acreage draws enormous bids

 

By Dina O’Meara and Rebecca Penty, Calgary Herald / June 2, 2011


CALGARY — Alberta will rake in $842 million from its largest sale of oil and gas drilling rights on record — including a whopping $107 million for a 7,900-hectare licence northwest of Red Deer.

Alberta Energy reported Wednesday afternoon it had sold leases or licences on 271,000 hectares at an average price of $3,100 per hectare.

The sale almost doubles the provincial take — in nine sales through May, it had raised $902 million at just $694 per hectare — and puts it on track to beat the record of $2.39 billion set in 2010.

Energy Minister Ronald Liepert said the injection of cash is unexpected, but welcome.

“Certainly, what it means for the government is it’s about $840 million we had not budgeted for,” said Liepert, while on a tour of the oilsands.

The provincial government is facing a forecast deficit of $3.4 billion for 2011-12, but Liepert declined estimating how big an impact the land sales revenue will have.

“It’s too early to tell because we haven’t even finalized last year’s budget yet, but it’s an injection into the revenue stream,” he said.

The biggest sale was registered to land agent Meridian Land Services and valued the land at $13,530 per hectare.

Another parcel with the same regional co-ordinates was sold to agency Canadian Coastal Resources, won with a bid of $57 million or nearly $14,400 per hectare.

The payout for a parcel the size of a township in central Alberta raised eyebrows among industry insiders as the region had not seen much interest prior to Wednesday’s sale.

Kathleen Dorey, chief geologist with Petrel Robertson Consulting, echoed surprise over the $810 million total spent on licences in the region.

“That’s amazing,” she said “It’s interesting because it is definitely an attractive area, and there hasn’t been a lot of activity there.”

The central Alberta region is part of the venerable Pembina oilfield trend, Alberta’s most prolific pool that has been producing since 1953.

Dorey said producers likely be targeting light oil and liquids-rich natural gas from Belly River, Nisku and possibly Cardium plays.

“If there is a land base available, which there seems to have been, that makes it really attractive, too,” she said. “The fact that they can actually get in there and drill wells that could potentially be oil rich is a big thing.”

Producers who had participated in the sale were flabbergasted by the results.

“Holy smokers, that’s unbelievable,” said Anthony Lambert, president and chief executive of Daylight Energy Ltd., upon hearing the size of the sale. “That’s a horrendous pile of money.”

Daylight bought three parcels near Edson in its own name for a little over $10 million, paying between $1,600 and $3,200 per hectare.

Lambert said it is filling in the spaces around its Cardium liquids-rich gas play.

He said the bigger bids in the Rimbey area are likely targeting the Duvernay shales.

Liepert said the massive land sale shows that industry players are taking advantage of advances in technology that allow companies to produce from reservoirs that would have previously been considered depleted.

“When we made the changes last spring with the royalty regime, it was to incent new technology and I think it’s working well,” Liepert said.

Travis Davies, a spokesman with the Canadian Association of Petroleum Producers, agreed.

“I think it’s reflective of advances in technology that’s enabled a resurgence of production of conventional oil from tight or low permeability reservoirs that we couldn’t access effectively or economically before.”

Posted June 2, 2011 by JasonMacAskill in Uncategorized