Oil juniors face a nasty culling
By Nicholas Kohler - Wednesday, January 21, 2009 - 0 Comments
Some say that as many as 200 junior oil and gas shops will fold
Alberta’s oil and gas juniors are hurting. The recession, low commodity prices, scarce credit and higher royalties have combined to push drilling activity lower than it has been in 16 years. Calgary’s TSX Venture Exchange, which lists many juniors, posted a massive market capitalization loss of $41 billion for 2008, losing almost 75 per cent of its value.
Greg Kuipers, president and CEO of junior Black Sea Oil and Gas, predicts that as many as 200 shops like his will soon go bust or be cannibalized by larger outfits. “When the oil prices come back,” he says, “the companies will be a lot more careful—and there will be fewer of them.”
