Kindersley 鈥� The Kindersley area can look to high-netback Viking light oil produced in the region to help sustain economic growth during the current low oil price reality.
鈥淚t is a quick return for the amount of money spent for the infrastructure, the drilling part, the return and to pay it off,鈥� said Councillor Vaughn Biberdorf, who works as a battery operator for Penn West Exploration at Avon Hill north of town.
Compared to other unconventional plays, he said, the Viking is shallower at only 700-750 metres in depth resulting in lower costs for drilling and completing a well.
鈥淚n Alberta, it鈥檚 double the size of drilling and it鈥檚 more expensive,鈥� said Biberdorf, who noted multistage fracking and horizontal wells half a mile long are proving to be the productive secret sauce.
鈥淭here鈥檚 less drilling time and less payout for the rig costs and that, and yes, the return is there,鈥� he said.
Penn West was one of several companies active in the area in late February, but Biberdorf is well aware that the overall pace of the industry is slowing down.
鈥淲e鈥檙e still drilling as are other companies, I am sure until breakup 鈥� then re-evaluation after the end of the first quarter at the end of March,鈥� he said.
鈥淲e鈥檝e got a big waterflood moving on 鈥� just starting and we鈥檙e trying to get that going. Things are going good yet.鈥�
He鈥檚 heard talk from maintenance companies in the area about being asked to cut rates, but he said that鈥檚 common practice.
More worrisome to some are competitors from Lloydminster, north of Lloydminster and Calgary cutting costs to grab a piece of the action in the Viking.
鈥淲e hope our guys can sharpen their pencils, but we want them to be sustainable as well,鈥� said Kindersley Mayor John Enns-Wind as the impact of the downturn unfolds.
鈥淭here鈥檚 been a number of contracts for individuals that haven鈥檛 been renewed. There鈥檚 been some layoffs,鈥� he said.
鈥淔or some of our seasoned guys, it鈥檚 the fourth or fifth time that they鈥檙e doing it. Experience has taught them how to manage their finances and what to expect with work.
鈥淔or the guys who are going through the first or second time, it鈥檚 a different experience for them.
鈥淪ome of them are a little bit nervous. They鈥檙e not sure how it鈥檚 going to pick up again whereas the senior guys 鈥� 鈥榶a it will go.鈥欌��
Despite the overall gloomy mood in the oil industry in the province, Enns-Wind said there鈥檚 a lot of confidence in the local economy.
鈥淟ast time I checked there were about 250 positions advertised in the area,鈥� he said noting the restaurant and hospitality association is still recruiting new workers.
鈥淲e鈥檙e doing better 鈥� talking with my mayoral colleagues in Estevan and Lloyd, it seems we鈥檙e doing better,鈥� he said.
鈥淚t seems like we haven鈥檛 been hit as hard. It doesn鈥檛 mean we haven鈥檛 been affected. There鈥檚 still confidence in the area. 鈥淧eople are confident and they鈥檙e making cautious but optimistic decisions. We have to grow.
鈥淲e鈥檙e too small for our shoes and so our commercial sector is growing, our retail sector is growing and oil will come back. 鈥淲e just have to wait and be prepared and that鈥檚 what I see a lot of people doing.
鈥淭here鈥檚 a lot of volatility in the oil market and for it to stay depressed for a long time 鈥� it鈥檚 difficult to imagine that.鈥�
Kindersley reported a record-setting building permit total of $28.9 million in 2014.
鈥淚t鈥檚 a combination of commercial development residential development, industrial and retail development that鈥檚 driving some of these things,鈥� said Enns-Wind.
鈥淲e鈥檝e been doing a lot of infrastructure work and planning is starting to pay off. I still think our record breaking years are ahead of us instead of behind us.鈥�
A ground breaking ceremony was held on March 6 for a new Boston Pizza at the 84-room Canalta Hotels construction site in the Holland Industrial Park on the north side of Highway 7 West.
Canalta is also paying a significant amount for the cost of a new lift station for sewage with project tenders issued. The second expansion of the Kindersley Inn fronting Highway 7 East is also expected to open by April with a total of 218 rooms available.
The new 43 room Snow White Hotel is also expected to be open by April on Highway 7 just east of the Hwy 21 junction.
Construction is also underway on a 109 room Best Western Hotel on 14th Avenue.
A development permit has been issued for a new Microtel Inn & Suites by Wyndham east of the new East Crossing strip mall at the east end of town. The new expanded home of Energy Dodge is currently being constructed at that location.
鈥淭here鈥檚 still room to grow here,鈥� said Enns-Wind about the outlook for building in 2015. 鈥淧eople are looking more long term and they need to get stuff started now, so when things do start up next year because prices have rebounded, they want to be ready for it.鈥�
Enns-Wind said he鈥檚 not surprised by the pace of growth in the early going of 2015 despite the slowdown in the oilpatch.
鈥淲e鈥檝e been living with shoes that were too tight. We had to expand,鈥� he said.
鈥淲hat I鈥檝e been pleasantly surprised with is that this is still going on with the downturn in the oil prices and that there is still confidence in the area.
鈥淲e still need a lot of employees for different businesses so there鈥檚 a transition out of the oilpatch into other areas. 鈥淲e have some of our ag dealers and service companies looking at expanding. We鈥檝e got the terminals that are expanding as well here and around town. 鈥淭hat all contributes. They employ a lot of people as well. There are a lot of different reasons to be upbeat.鈥�
Priority one for the town is housing focused on the Brookhollow Estates subdivision by Marathon Properties.
The first two six-unit condo structures are completed and for sale and four new houses are under construction with eight lots sold in the first phase development.
The town is also talking with another developer about building several apartments at different locations for those who can鈥檛 afford homes. 鈥淚t seems to be that we primarily need apartments, but there鈥檚 nothing firm to announce,鈥� said Enns-Wind.
鈥淲e kind of have a perfect wave 鈥� where all these circumstances come together but we need more housing for economic development."
鈥淧eople are attracted by quality of life and they want positions to go to. Currently, we still have positions for people to come to.聽 We have a housing problem and our quality of life 鈥� we鈥檙e trying to address through a multi-use facility for arts and for recreation.We鈥檙e doing all these things concurrently, so we鈥檙e just plugging away at it.鈥�
Kindersley plans to spend about $1.3 million this year on its water main replacement program with Build Canada funding. Other quality of life projects like a new swimming pool could hinge on the impact of the provincial budget on March 18.
鈥淭hat鈥檚 the $64,000 question. Currently, we (municipalities) have a revenue sharing with the province where we receive 20 per cent of the revenue from the five per cent sales tax revenues. The premier said that鈥檚 on the table,鈥� said Enns-Wind.
鈥淭he premier is looking at changing that so SUMA (Saskatchewan Urban Municipalities Association) has been lobbying hard that that shouldn鈥檛 be that case.
鈥淥ur local organization with the West Central Municipal Government Committee 鈥搘e鈥檝e been talking very much and talking with the province as well 鈥� 鈥榥o you can鈥檛 be doing this.鈥欌��
In the end, the province did not reduce its revenue sharing commitments in the 2016 budget.
