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Last updateTue, 28 May 2024 4pm

Get ready to Stuff The Bus


    While the oil and gas industry in Drumheller continues to work its way out of the slump it has experienced, the verdict is out on whether the Alberta government’s plan to change royalty structures, yet again, will have any impact.
    Gord MacKinnon of Blackwatch Energy Services says the slowdown was a combination of factors.
    “While I think the royalty debacle was poorly timed and poorly executed, I don’t think it was solely responsible for the down time in the oil industry, but it certainly didn’t help anything,” said MacKinnon.
    He says gas prices were softening throughout 2008 before the new structure came into place. This, combined with lower demand as the US fell into recession, hit the industry hard all over. There was also considerable movement towards developing shale plays in BC and other areas.
    Last month the Alberta government announced changes touted as delivering on oil and gas competitiveness. The changes are expected to create 8,000 jobs in 2010-2011, and then 13,000 jobs annually.
    MacKinnon is hopeful that the industry will turn around, but in the short term it may not have as much impact.
    “I think long term it will affect the whole province, there is no doubt about it. In the short term, you won’t see anything really,” he said.
    One of the reasons he is less optimistic about the short-term prognosis is because companies now have to reassess the latest new deal.
    In 2007, the Alberta government released the new Royalty Framework and in January 2009 introduced a new royalty regime. It has since been adding incentives.
    “Every time they make a change to the royalty regime, it is a trickle down effect. The oil companies get that information, and they go back, analyze it and pick it apart to see what it means to all the different segments of their drilling program, and how they are going to drill wells and how they are going to spend money. That takes time,” said MacKinnon.
    “It is almost as bad making changes every three months to it, than moving it and leaving it that way… when you finally figure out what it all means they come up with a new idea.”
    Miles Travis, service operations manager for Midfield Supply says there is no doubt there is a slump in the market in the Drumheller area, and he says the cause was much more than just the royalties, but he is optimistic.
    “He (Stelmach) had to do something,” he said.
    While the royalty rate didn’t help, the slump in prices was a big factor in the change. While it may be perceived as an exodus, he says many of the players were planning to head to areas such as Northern BC regardless of the rate structure, and Midfield is still doing major quotes and bids for some of that work.
    “It’s been a bad one… but they (the larger companies) will be back,” said Travis.

Four charged in Ponzi scheme back in court June 18

    Four charged in relation to an alleged $60 million Ponzi scheme did not appear in person on Friday, April 16 in provincial court in Drumheller.
    Murray Stark, 73 of Three Hills, Robert Fyn, 62 of Linden, Garth S. Bailey, 57 and Katherine Rodrique Bailey, 53, of Okotoks were scheduled to be in court last Friday. Local lawyer John Sparling QC acted as agent for Paul Brunnen and Don Macleod QC, counsel for the accused.
    Sparling asked to reserve the elections for the accused and put their next appearance over until June 18, 2010 to allow for defense to receive considerable disclosure which include substantial electronic information.
    Stark, Fyn and Garth Bailey face charges of fraud over $5,000 and conspiracy to commit fraud. The three, and Katherine Rodrique Bailey, also face charges of laundering proceeds of crime and conspiracy to launder proceeds of crime.
    RCMP Calgary Commercial Crime Section launched this investigation in 2004 and believe approximately one thousand victims throughout North America invested more than $60 million US into various alleged fraudulent  investment programs offered by Alberta registered company HMS Financial.

Badlands Rail Company enters negotiations with CN for rail line

    Negotiations have begun with CN on the possibility of producers and investors acquiring the rail line from Lyalta to Oyen.
    The group, operating under the name Badlands Rail Company, has made an offer to CN.
    Dwayne Marshman, current chair for the board making up the company, says it appears to be positive.
    “They seem interested in making a deal, whether we can raise the capital needed we have to find out later,” said Marshman. “I don’t think CN is really interested in closing down any railroads, the only issue is it is a dollar and cents thing. If someone is interested in purchasing it and running it, and delivering cars to them, I think they would be more than happy.”
    He could not release the details of the company’s offer, as negotiations are  still ongoing.
    Leading into negotiations, they held investor meetings throughout the area explaining the project, and urging investors to get on board with an idea that could potentially save producers transportation costs. He is happy with the position the company is in going forward.
    “We need to raise a little more initial capital,” he said. “We have done pretty good as far as our funding so far.  We needed $200,000 for a deposit and we have it. But we need a little more money for our consulting fees and legal fees and some engineering work. We are going to have to raise another $100,000 but we are confident that as we need that money, we won’t have any trouble getting it.”
    He says beyond producers, there are other industries interested in using the rails. With a functioning railway in place, there are possibilities of other spin-offs including commercial traffic, tourism and even a commuter train.
    “We do have some other industries that are definitely supporting us, and we do have other new industries that a railroad would certainly benefit them if they could get quality on time service,” said Marshman. “There are so many avenues opening up right now,  we get calls on a daily basis.”
 The group was required to notify CN they were interested in making an offer by February 15, and then they had to March 31 to make an offer. The two groups met on April 8.
    “We have to have a finalized deal by August 16 at the latest, we’re hoping we won’t take that long,” said Marshman.


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