Oil towns ranging from the Gulf of Mexico to the Northwest territories are hurting. Job losses everywhere, home prices have taken a dive, consumer spending has dropped, and oil companies have shut down, crippling the businesses that support them.
There is an area however where despite historically low oil prices, exploration and production companies can still make money. Canada’s Grande Prairie in northwest Alberta. It has been well known as a spectacular reservoir since the late 1970s, but for decades, the technology to unlock its potential economically was not available.
The formation has tremendous potential, and the National Energy Board calls it one of the largest hydrocarbon reservoirs ever discovered in Canada and North America. Their analysis reports 449 trillion cubic feet of recoverable natural gas and 1.1 billion barrels of marketable oil. As such it is considered a gold mine. Despite the slump in prices, companies like Progress Energy (PREX), Tourmaline Oil (TRMLF), Peyto Exploration and Development, Seven Generations Energy (SVRGF) and Painted Pony Petroleum (PDPYF) are still aggressively drilling in the region.
Global players like ConocoPhillips (COP), Repsol (REPYF) and Royal Dutch Shell (RDSA) are also active in the area. This doesn’t mean that these companies are not feeling the squeeze of low oil prices because budget cuts are also part of their operations here. But Grande Prairie is a better place to be thanks to a combination of great infrastructure and an advantageous geology.