By Matt Nemeth

Activity levels picking up but oil rebound may not be as high as hoped

Jun 28, 2017 | 5:52 PM

MEDICINE HAT, AB — There are signs the local energy industry is bouncing back after a tumultuous three years but the rebound might not be as high as previously hoped.

Calfrac Well Services hosted a hiring fair here in Medicine Hat Wednesday because their workload has increased says district manager Jeff Russill.

“Currently things are really busy, our schedule’s full,” he said. “We have a great outlook for the year and we have a lot of commitments from our customers and clients right now.”

Calfrac closed their doors in the city back in March, 2016. They’re now back, and Russill says a lot of people might be unaware they have a location open at the moment.

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The company was looking to hire about 70 people by holding the fair, but the district manager admits it’s been a bit of a challenge filling positions lately.

“I think it’ll take a bit for people to regain their confidence in the oil industry,” said Russill. “But it’s been going well, we’ve been getting a lot of qualified candidates coming out. You come to a place like Medicine Hat where there’s a lot of experience in the area, and it’s where we’ve had our most success.”

On Wednesday the price of oil closed at $44.74 USD per barrel. The commodity has fallen nearly 17 per cent since the beginning of the year, which could start impacting activity levels in the patch says ATB Financial Chief Economist Todd Hirsch.

“If they (prices) kind of stay in this range for the rest of the year we could start to see energy companies paring back on their capital spending, maybe paring back a bit more on their employment again,” said Hirsch.

The province’s chief economist doesn’t see oil getting above the $50 to $60 USD per barrel mark in the next three to five years, which would throw a major wrench in the NDP’s recent budget forecast.

Alberta Finance Minister Joe Ceci’s budget has oil pegged at $55 USD per barrel for the year, and is already predicting a $10.3 billion deficit.

“For every dollar that oil price falls that’s fewer dollars flowing to the provincial government, so it will affect the budget,” says Hirsch. “It will affect deficits and forecast deficits going forward if we don’t see these prices rally back up to around $50 (USD per barrel).”

With US shale producers being able to come online so quickly Hirsch says oil prices will be capped for at least the next few years.

For the time being though, Calfrac says they’re just happy to be back in Medicine Hat.