Originally published June 27.

Two years ago, $50 oil would have been considered a nightmare scenario. Even last June, no one in the energy sector would have welcomed it. But two years into the oil price rout, that is the world the oilpatch is living in.

So what does life at $50 US a barrel look like?

The last two years have been a mess for the energy sector. Tens of thousands of jobs have been cut, capital spending dove, drilling is expected to be at a 40-year low, bankruptcies are piling up and cash flow doesn't come close to cover spending.

Current oil prices are not supportable. They could be in time, but not today. - Philip Verleger , energy analyst

But there are some (relatively) bright spots. One is around pricing: crude oil has been trading in the $45 to $50 US range for roughly two months and there's some confidence that the bottom is behind us.

"Looking forward with a reasonable set of assumptions, the market is set to balance in the second half of this year and continue to get better in 2017," said Jackie Forrest, vice-president of energy research with ARC Financial.

"We won't be seeing super high prices, but we won't be adding to inventories each day and worrying about the fact that there's no place to put the oil."

$129M bet on much higher prices

A U.S. energy investor was recently willing to throw $129 million at a deal that will only reap rewards when oil is trading back above $75 US.

Last week, Burgess Energy did a deal with Calgary-based Athabasca Oil, in which it bought a stake in future royalties at the company's oilsands operations for $129 million. Those royalties will only be paid when oil is trading above $75 US a barrel — a price point barely dreamed about these days.

Burgess is clearly feeling pretty good about the prospect of higher prices.

"This is a unique process," said Matthew Taylor, Athabasca's vice-president of capital markets. "I haven't seen a deal structured this way in the oilpatch. They have a very bullish long-term view on oil prices."

Athabasca needed the money to pay down debt, a definite theme in the sector these days.

Damaged balance sheets need to be repaired

"At $50 oil, there's a little more cash coming out of companies," said Forrest.

But she adds that she thinks companies are going to be "very cautious" about spending as they get more money. "They have damaged balance sheets and other places to put their money other than investing in new projects."

In the wake of last week's Brexit vote, oil has dipped to $46 US a barrel. But many analysts think it has stabilized around that mark. (Thomas Samson/Getty Images) That means it will take time before any spending on growth, which means it will take some time before there is any hiring. But have the job cuts ended?

In order for the job market to hit bottom and then stabilize, the U.S. Federal Reserve estimated it would take oil prices holding steady at $50 US a barrel for two or three months. In Canada, it's expected that it will take more time than that for hiring to start.

The oilpatch cut 28,145 direct jobs in 2015, more than 10 per cent of the workforce, according to labour-tracking firm PetroLMI. Many of those cuts were in the service sector, which will take longer to recover than the exploration sector it serves.

"I hope we've seen bottom," said Mark Scholz, head of the Canadian Association of Oilwell Drilling Contractors. "Most are expecting that around the $50 range, it's at least stable and we're going to start to see gradual increases from there.

"But what's going to happen first is our customers, the E&Ps [exploration and production] are going to be fixing their balance sheets, paying down debt, getting their fiscal house in order."

Not everyone convinced $50 is here to stay

In its June monthly oil report, the International Energy Agency said the oil market came into balance in the first half of 2016, in part because of the wildfires in Fort McMurray and outages in Nigeria. It also expects the market to stay balanced for the rest of the year, as the summer driving season gets underway in North America, and for demand to exceed supply around a year from now.

But Philip Verleger isn't convinced. The Colorado-based analyst called $50 oil a mirage caused by the outages; he expects oil to fall back to the mid-$30s in the near term.

His thesis is based on the huge amount of oil in storage around the world. "Globally, commercial stocks are far too plentiful to maintain current prices absent ongoing disruptions," he wrote in a report last week.

"Current oil prices are not supportable. They could be in time, but not today."

Forrest agrees that oil inventories are a problem, as there are an additional 500 million barrels in storage in North America right now than is typical this time of year.

"That will definitely keep a lid on how oil prices go in the short term," he said. "But if we get into a situation of a big outage that no one's expecting, or [by] the end of 2017, when we might have a shortage of production supply, I do think we'll see higher prices."