When executives from Calgary-based PrairieSky Royalty Ltd. announced their earnings on Tuesday, they were hard pressed to say what exactly the future holds for Canada’s beleaguered oil sector.
So far, the company estimated that Canadian oil companies have already cut or shut in about 10 per cent of their production as social distancing and other policies designed to contain the spread of coronavirus extinguished demand and punished oil prices.
But as far as how much more oil production cuts are coming, no one can say exactly.
“So the 10 per cent is the actual number that we’ve seen” of shut ins, said Andrew Phillips, chief executive of PrairieSky. “Twenty per cent is what we’ve been told by industry (to expect in May). My view, and this is my view only, is that it’s going to be significantly higher than that in May.”
The commentary is instructive as earnings season kicks