I had been telling everyone that Canadian oil prices had collapsed. This quarter report includes the period where Western Canada Select oil prices went below $50, per barrel. High cost operations may have to be closed down. This is why WEE is going international. Global oil prices are $114. It is a different world. Western Canada Select has now recovered somewhat to about $65 with pipeline activite and higher WTI prices due to alleviation of U.S. fiscal cliff, European, and Chinese hard landing risk.
As WEE states:
"For example, in Canada, the price differential between the benchmark heavy oil prices, Western Canadian Select (“WCS”) relative to West Texas Intermediate (“WTI”) is currently about $35 per barrel. The Company anticipates that prolonged high price differentials may negatively impact Powerwave mature field revitalization revenue generated in the Canadian market as oil producers evaluate operational strategies to cut operating costs to address low net back from production operations (Netback is
calculated by taking price of the oil, less all costs associated with getting the oil to a market. These costs can include; transportation, production and disposal, refining costs, royalty fees, taxes, and so on).