Article content continued

The Calgary investment bank said there were striking differences between companies focused on Canadian and American assets, with cash costs per boe for the former down 13 per cent, but up one per cent for the latter in the first three months of 2015 versus the same period last year.

National Bank, meanwhile, said cash costs including operating expense, transportation, royalties, administration and interest fell by an average of about 24 per cent ($7.14 per boe) among Canadian oil and gas companies it covers in the first quarter compared to the 2014 annual average.

“The main energy input costs were down about 41 per cent on average in the quarter (relative to full year 2014), which indicates that a significant portion of the cost reductions were due to lower commodity prices and therefore may not be fully sustainable when commodity prices recover,” it cautioned.

Peters also noted that overall production per share was up four per cent year-over-year, while cash flow per share was down 48 per cent as the Edmonton Par oil price fell 47 per cent and Alberta AECO gas prices were off 51 per cent.

Large producers, led by Canadian Natural Resources Ltd., posted average output per share growth of four per cent. Intermediate companies grew production by seven per cent and juniors eked out a one per cent rise, it noted.

National Bank said it calculates that the 54 companies in its coverage list will have an average cash cost per boe of about $45 Cdn this year, based on its revised forecast of an average 2015 West Texas Intermediate oil price of $56.50 US per barrel and a 2015 AECO price of $2.60 per thousand cubic feet.

“We continue to believe the industry will require oil prices over $70 US per barrel to be sustainable on a full-cycle basis,” it concludes.

Peters said cuts to 2015 capital plans due to lower oil and gas prices will impede longer-term growth.

dhealing@calgaryherald.com

Twitter.com/HealingSlowly