Winnipeg Free Press

Winnipeg Free Press (Newspaper) - July 25, 2015, Winnipeg, Manitoba C M Y K PAGE A3 Gimli Fish 801 Regent Ave. 204- 222- 4672 596 Dufferin Ave. 204- 589- 3474 625 Pembina Hwy. 204- 477- 6831 1083 St. Mary's Rd. OPENING SOON Fresh Wild BC Sockeye BIRCHWOOD HONDA WEST .... - ........ Portage Avenue ...... - ...... - ........ birchwoodhondawest. ca BIRCHWOOD HONDA ON REGENT ........ Regent Avenue West WEST ...... - ...... - ........ hondaonregent. ca ON NOW AT BIRCHWOOD HONDA WEST & BIRCHWOOD HONDA ON REGENT! ........ .. DAY CIVIC SALE! GET THE YEAR'S BEST DEALS ON CANADA'S BEST .. SELLING CAR ENDS TODAY! OR AND .. .. , ...... CASH PURCHASE SAVINGS # .. .. , ...... LEASE OR FINANCE BONUS .. .. . .... % LEASE OR FINANCE RATE �? # Cash purchase savings of up to $ 2,500 on select new and unregistered 2015 Civic models - 4D DX 5MT and 4D Hybrid NAVI CVT models excluded. �$ 1,500 Lease or Finance Bonus available on new 2015 Civic models leased or financed through Honda Canada Finance Inc. (" HCFI") and delivered by July 25, 2015. Lease or Finance Bonus can be combined with rates advertised by HCFI and will be deducted from the negotiated vehicle price. �? Lease example: Limited time lease offer from HCFI, On Approved Credit, applies to a new 2015 Civic DX, model FB2E2FEX, for a 60- month period, for a total of 260 payments of $ 35 leased at 0.99% APR. 120,000 kilometre allowance ( 12 cents/ km excess charge applies). Consumers may pre- purchase up to a maximum of 16,000 extra km/ year at $ 0.08/ km at the time of entering into the lease agreement. Total lease obligation is $ 10,091. Lease obligation includes freight and PDI of $ 1,495 and applicable fees. No down payment required. Taxes are extra. Dealer may lease for less. Finance example: Amount financed is $ 20,000 at 0.99% APR over 84 months equals $ 246.54 per month. Cost of borrowing is $ 709.25 for a total obligation of $ 20,709.25. Taxes are extra. 2015 Civic 4D LX 5MT models excluded from special lease and finance rate offers - standard rates apply. #/�'/�? Offers valid from July 21, 2015 through July 25, 2015 at participating Honda retailers. Offer valid on new in- stock 2015 vehicles. While quantities last. Visit HondaManitoba. com or your Manitoba Honda dealer for details. � 2015 Honda Canada Inc. Birchwood Honda On Regent dealer permit # 9387. Birchwood Honda West dealer permit # 5266. ........ Civic Sedan Touring Model Shown Stock # FO7654 TOP NEWS CITY EDITOR: SHANE MINKIN 204- 697- 7292 I CITY. DESK@ FREEPRESS. MB. CA I WINNIPEGFREEPRESS. COM SATURDAY, JULY 25, 2015 A 3 O IL- INDUSTRY malaise has spilled into southwestern Manitoba, where drilling activity has plummeted, fewer players are on the ground and the number of cancelled licences has skyrocketed. Manitoba's modest oilpatch, which grew rapidly in recent years, is retracting almost as dramatically, thanks to the significant plunge in oil prices severely impacting Alberta's oilsands and cooling off drilling activity in Saskatchewan and North Dakota. Manitoba Mineral Resources predicts 250 wells, most of them horizontal, will be drilled in the province this year. That's down 54 per cent from 2014, when 464 wells were drilled in oil plays near Waskada, Pierson, Cromer, Virden, Birtle and other southwestern Manitoba communities. As recently as December, 350 new wells were expected by the province this year. The optimism was due to the relatively cheap cost of horizontal drilling and hydraulic fracturing in southwestern Manitoba, where Bakken- formation and Three Forks oil deposits lie closer to the surface than they do in North Dakota and Saskatchewan. But as 2015 wore on, the province revised its forecasts down, first to 280 wells for the year and now to the current 250 prediction. " There is a slowdown. The numbers definitely point to that," said Keith Lowdon, director of the petroleum branch within Manitoba Mineral Resources. " When you compare what you think was going to happen to what is happening, we're down." Oil companies are not only drilling fewer wells in Manitoba. So far this year, they've cancelled 135 drilling licences, up from 26 cancellations in all of 2014. Lowdon said some firms may be holding off due to cash- flow issues while others may be waiting for higher oil prices to return. The price of a barrel of crude is down by roughly one- third since last summer. " That could change tomorrow or this afternoon," Lowdon said. " When prices were up, nobody knew how long it was going to last. Companies are waiting." There are also fewer oil companies active in Manitoba. The largest player in the province remains Winnipeg's Tundra Oil & Gas, which grew early this year by snapping up Waskada- play assets that belonged to EOG Resources after the firm stopped drilling in the area late in 2014. Tundra is said to be in the process of purchasing the Waskada assets of a second firm, Penn West. The paperwork has yet to be processed, but employees have been notified, Lowdon said. Officials at Tundra, which is privatelyheld, could not be reached for comment. As a result of Manitoba's oil- industry contraction and concentration of ownership, the sector's labour force is believed to be down from the most recent estimate of 5,500 workers. Lowdon said while he does not have a current oil- industry labour- force estimate, it's reasonable to assume numbers are down. This presumed labour- force decline, however, pales dramatically in comparison to the projected job losses of up to 185,000 workers in Alberta, where more- expensive oilsands operations have been devastated by lower prices. Manitoba's oil sector is just one piece of this province's economic pie. " If you look at the Manitoba economy, although the ( oil) industry is definitely impacted, it doesn't impact us as much overall, because we're more diverse," Lowdon said. Direct revenues from oil production have not dropped dramatically. Provincial production taxes are down only slightly, to $ 1.7 million during the first quarter of the 2015- 16 fiscal year from $ 2 million during the first quarter of the previous year. Petroleum royalties and fees, meanwhile, actually rose to $ 2.8 million during the first quarter of the current fiscal year, up from $ 2.3 million during the first quarter of the 2014- 15. But this figure is skewed by a $ 700,000 land sale that took place this May, according to the province. The indirect result of Manitoba's oil slowdown is more dramatic. In 2013, the town of Waskada raked in roughly $ 600,000 from a mineral- rights bequest. This year, the newly merged Municipality of Brenda- Waskada expects to take in only $ 60,000 from mineral rights, head of council Gary Williams said. More significantly, entrepreneurs who purchased the town's hotel during the recent oil boom have shuttered the business, depriving Waskada of a fullservice restaurant and gathering place, Williams said. " We understand what happens with oil. We've been through it before," he said, referring to a previous boom- andbust cycle in the 1980s. " You dump a lot of strange people in your area. It's interesting. It's an opportunity for some people to make a lot of money, go back to where they live and spend it there." Williams said the strength of southwestern Manitoba's agricultural economy - which expects to reap the benefits of excellent crop yields this year - balances out the oil slowdown. " It's amazing, because we've always been part of the ( semi- arid) Palliser Triangle. But we've been catching showers," Williams said. bartley. kives@ freepress. mb. ca ALBERTA OILPATCH HURTING B12 As oil prices drop .... $ 106.65 Price of a barrel of crude in June 2014. $ 70.65 Price of a barrel of crude in June 2015. ... so does drilling activity 464 Number of oil wells drilled in Manitoba in 2014. 350 Projected number of wells to be drilled in 2015 ( as of September 2014). 280 Revised projection for 2015 ( as of June). 250 Current projection for wells to be drilled in 2015. 108 Wells drilled in 2015 ( as of July 20). - source: Manitoba Mineral Resources, Petroleum Branch Oil- industry slowdown Falling prices lead to fewer Man. wells, drilling licences By Bartley Kives RUTH BONNEVILLE / WINNIPEG FREE PRESS FILES Manitoba Mineral Resources is predicting 250 oil wells will be drilled in Manitoba this year, down 54 per cent from 2014. A_ 03_ Jul- 25- 15_ FP_ 01. indd A3 7/ 24/ 15 10: 34: 57 PM ;