More drilling boosts optimism in long-suffering Nisku oil-and-gas sector
After a year of layoffs, some companies have started hiring again
Things were so desperate at Hi Quality Machine in Nisku last year that only three employees were left standing after several rounds of layoffs.
All of them were family members.
After 37 years repairing and making parts for use in the oilpatch, orders were drying up. And with oil hovering as low as $30 a barrel, few companies were drilling wells.
A year later, owner Cory Priebe is hopeful things might be turning around for Alberta's oilpatch.
"Some of my main customers are putting the rigs back to work, so that's our gravy is building things for the rigs," said Priebe.
With oil now above $50 a barrel, drilling activity is picking up. That has led to more work for Priebe, who has now hired back a machinist he let go last year.
At this time last year, only one-quarter of the 650 rigs in the industry were being put to work in western Canada.
Today, about half of those rigs are back in business, bringing a much-needed boost to the Nisku Industrial area, which was hit hard when things slowed down.
"When we see that kind of drilling activity pick up in western Canada, that certainly gets those service companies and those drilling companies back to work," said Barbara Engelbart McKenzie, executive director of the Leduc-Nisku Economic Development Association.
Last year, the area saw layoff after layoff. Engelbart McKenzie estimates as many as 8,000 people lost their jobs.
"I believe the biggest swing of layoffs are definitely over," she said. "Companies are more efficient, more economical."
Trump policies still a cause for concern
While some companies have started hiring again, and drilling numbers are encouraging, uncertainty remains.
Citadel Drilling in Nisku has all six of its rigs operating right now. But CEO Dan Hoffarth is still concerned.
"There are some bright spots in the marketplace right now," he said. "But I wouldn't take that as a sign of meaningful recovery."
Hoffarth said an increase in drilling numbers should be expected anyway during what is the peak of the winter season.
And there are other factors that have him on edge, in addition to the slowdown that will come with spring break-up.
"Especially when we take a look at the uncertainty around our industry with president Trump taking power in the U.S.," Hoffarth said. "And not knowing what his actions are going to do. There's talk of an energy tax."
Still, Hoffarth is pleased to have all his rigs fully staffed and working for now, whatever the future might hold.
At Hi Quality Machine, Priebe is confident the worst days are behind him.
"We can definitely see the light at the end of the tunnel. We can feel it."