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October 2009

Ally

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Drilling Forecast Brightens - A Bit

With natural gas prices expected to slowly climb next year, there is a glimmer of hope in the latest oil and gas well drilling forecast.

"It`s still pretty marginal, with the active drilling rig count increasing by four per cent next year and most of the increase coming in the second half of 2010," Nancy Malone, manager of economic analysis for the Canadian Association of Oilwell Drilling Contractors (CAODC), said Wednesday.

This year, the industry was hammered as low gas prices forced a curtailment of drilling. The 209 rigs drilling a projected 8,278 wells in 2009 represent a fleet utilization rate of just 24 per cent. That rate is expected to climb to 27 per cent in 2010.

By comparison in 2008, 351 rigs drilled 16,844 wells for an average utilization rate of 40 per cent. And in 2007, 336 rigs drilled 19,144 wells for a utilization rate of 38 per cent.

The rig fleet, which peaked at 902 in 2007, is now 840 and expected to average 800 next year.

The CAODC forecast is based on oil at $70 US a barrel, and gas at $5.50 Cdn per million cubic feet-- $1 more than the current price. But gas futures are trading at $5.50 for the second half of 2010.

Read the full article here.
 

Ally

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Calgary Group aims to make City a Global Finance Centre

Calgary - already a key hub in energy finance - wants to position itself as a global leader beyond oil and gas.

Over the next five years a new advisory committee loaded with financial sector heavyweights will leverage Calgary`s cachet as an energy capital to bolster its status as a global financial centre among other industries.

The Financial Sector Advisory Committee will focus its efforts on diversifying Calgary`s capital market base to attract global firms to the city to do more than just energy transactions, officials said Thursday.

The goal of the nearly two-dozen member committee, a collaboration between Calgary Economic Development and industry leaders, is to educate and to help facilitate the growth of the financial service sector, said George Gosbee, executive director, Macquarie Capital and committee co-chair.

"The financial service sector right now is predominantly based off of the backbone of the energy sector and what we would like to do is grow it from just energy to other industries," he said following an event in Calgary to introduce committee members.

Positioning Calgary as a global financial centre is one of several goals arising from the 10-year Calgary Economic Development strategy.

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Ally

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Demand will Support Mackenzie: Exxon

Natural gas demand will increase by 50 per cent in the next two decades, creating enough room to bring online the Mackenzie pipeline, a senior Exxon Mobil Corp. (XOM-N71.72-2.24-3.03%) official said Friday.

There is "room for a lot of gas in North America," said Andrew Swiger, senior vice-president and member of the management committee of Exxon Mobil .

"We see an expanding gas framework that provides plenty of support for projects like the Mackenzie project," he told a breakfast audience in Calgary.

"And we along with the other proponents of the project continue to work diligently with the communities, the regulators and the government. ... We hope that we will see an outcome to that in the not too distant future."

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Ally

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Market Relatively Soft

The local real estate market remained relatively soft in September, with 122 homes selling through the Multiple Listing Service in Red Deer. That was down 34 per cent from September 2008, when there were 185 residential sales.

In the surrounding region, 199 homes sold last month — a six per cent decline from a year earlier, when 212 homes were sold.

However, the Central Alberta Realtors Association said in a news release that new residential listings being added to the MLS system have been lower every month this year than in the corresponding period of 2008. As a result, the inventory of unsold homes has been shrinking.

The association calculated that current listings are enough to sustain the market for 7.4 months. In December, the inventory stood at 17 months.

It also pointed out that the year-over-year decline in homes sales in September was smaller than was the case earlier in 2009.

"The market is firming up," said association president Derek Austin. "The number of new listings continues trending lower, so sales activity is paring down inventories."

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Ally

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Annexation gets the OK

The City of Red Deer will officially expand its borders by 7,410 acres after Premier Ed Stelmach`s cabinet recently approved an application to annex Red Deer County land.

The government approval is retroactive to Sept. 1, 2009.

More housing, commercial and industrial development will come to town with this first phase of annexation. Previously, industrial land was annexed in 2007.

City manager Craig Curtis said the additional land will meet the demands for development in the city`s north and east regions.

"Even in these difficult economic times, our population and development permit numbers continue to rise," said Curtis.

The city has been preparing for months for annexation with the hiring of additional staff.

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Ally

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Thumbs up for Secondary Suites

Proposed regulations that would open the door for development of more secondary suites in Red Deer have received a thumbs-up from the city`s municipal planning commission.

The commission voted on Monday to support draft amendments to the land-use bylaw that would allow up to 20 per cent of detached dwellings in neighbourhoods throughout Red Deer to contain secondary suites, and to recommend to city council that it proceed with first reading of a bylaw to implement those amendments.

The initiative flowed from the city`s affordable housing strategy.

Currently, secondary suites are only allowed in specified areas, including designated sites in newer neighbourhoods. With the proposed changes, they would become a permitted use in many areas and a discretionary use in others.

In the case of West Park (excluding Westlake), as many as 144 secondary suites would be allowed, based on the 20 per cent limit.

For Bower, the maximum would be 88; for Glendale, it would be 152; and for Vanier Woods, it would be 77.

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Ally

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Alberta on the Rebound

Gone is Alberta`s jack rabbit economy – in 2009 it looked more like a turtle crawling backwards.

But that turtle has a grin on its face, says an Alberta economist.

Todd Hirsch, senior economist at ATB Financial, said despite the recession, a more balanced job market, a stable housing market, and rebounding oil prices are working in Alberta`s favour.

"Despite the fact we`re in this nasty recession, people from other provinces, on a net basis, are moving to Alberta. They are still trickling in. That`s good news for the housing market. It`s good news for business and personal services," said Hirsch in his presentation to members of Central Alberta Rural Manufacturers at Red Deer Lodge on Wednesday night.

Alberta may have an unemployment rate of 7.1 per cent, but if provincial migration is taken out of the equation, the unemployment rate would only be six per cent, not far from five per cent which is considered a balanced job market, he said.

"At three percent, it`s too tight. Employers have to trick people to coming to work for them" said Hirsch, recalling how during Alberta`s recent boom he heard about an oil company giving rig workers a bonus if they showed up to work for five days in a row.

Read the full article here.
 
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