The Globe and Mail

Bill Andrew, chief executive, Penn West Exploration

(large oil and gas producer, with China Investment Corp. as a partner on some of its oil assets, and Japan’s Mitsubishi as a partner on some of its gas leases)

The thing I fear a little bit is too much success. We sort of saw what happened last time as oil CL-FT crept over $100 -- there’s a lot of push for alternative forms of energy. That’s probably a good thing, but not as good as having the space to yourself. I started hearing a couple of weeks ago a little bit about the price of gasoline in the States, people starting to say things. They have been very quiet since oil took its tumble toward the end of 2008, but they are starting to make the same sounds again, seeing higher prices at the pumps. And that’s usually where the push comes to look at other forms of energy besides gasoline for cars.

We’re drilling very little of our gas portfolio right now. However, we were fortunate in that we did a deal with Mitsubishi out of Japan on a property we have in northern British Columbia. They are a great company in that they really take a look at the long term and the long view. We probably wouldn’t be as aggressive in drilling up there, but with the partnership, we have two or three rigs running, drilling for gas, but everything else is drilling for oil.

CIC’s involvement allows us to move forward with two projects that would have taken a fair amount of internal funding to move in addition to our portfolio of light oil projects. So now we can move everything forward, which is really going to make a difference, not only this year but three or four years up the road. Basically, without them, there’s not enough money in the piggy bank to do everything, even despite $100 oil.

Chuck Szmurlo, vice-president of alternative and emerging technology, Enbridge Inc.

(major operator of oil and gas pipelines, and developer of new energy projects)

I’m happy to see higher prices. It enables more projects to be developed in the oil sands and more [pipeline] volumes for us. But it makes alternatives to oil more attractive as well. Things like wind power and solar power and geothermal power are typically not affected by cost [inflation] the way the oil sands are. As a green energy guy, I see it as making those green energy investments comparatively more attractive.

And because often-times natural gas doesn’t link with oil the way it used to, you get a bigger disparity between gas and oil. That raises a lot of interesting possibilities. One of the things we’re looking into, as a matter of fact, is the use of things like liquefied natural gas for long-haul trucks. I think it makes a lot of sense to explore converting as much of our vehicle transportation network to natural gas as possible. We’re looking at the potential of providing infrastructure to other organizations’ fleets.

Scott Saxberg, chief executive officer, Crescent Point Energy Corp.

(producer focused on light oil)

With oil at $100, it means we can spend a couple $100-million more per year and grow our production more rapidly. We have 20 years of drilling inventory ahead of us, and for us to accelerate slightly in the higher price environment, we will do that and grow more.

Part of it, however, is how real the $100 price is. In our view we would initially look to see how long that $100 is sustainable and probably pay down debt for a period of time – probably three to six months. And if it is a real longer-term change in dynamics, then we will increase our capital spending. We hedge continually, so we wind up locking that $100 into the future, and reducing our risk after we ramp up our capital. I’m a little skeptical of how sustainable it is for the U.S. economy to support $100 oil.

Brian Ferguson, chief executive officer, Cenovus Energy Inc.

(oil sands-focused company that drills wells, rather than build mines, to produce bitumen in north-eastern Alberta)

What it really does for us as a company is to reinforce our emphasis on technology and research and development, to find more and better ways to continue to increase recoveries from the great resource base that we have.

It’s not a short-term link. This is a long-term link. If you believe that we are in an era where we’re going to see oil prices sustainably in that $80 or higher range, then it should provide more incentive for the industry to continue to focus on more technology and ways in which to continue to improve recoveries.

Particularly if you think about the economic equation of oil versus natural gas, where natural gas margins are relatively low compared to oil these days -- if you’re a believer that that will continue for some period of time, then everything that you can do to improve your recoveries simply adds value for you company and for the industry.

John Zahary, chief executive, Harvest Operations Corp.

(the Canadian branch of Korea National Oil Corp. and focused on oil)

Land prices for oil-weighted land have gone up a fair bit as people are trying to re-jig their stories. You have to quickly do deals. It is one thing to come out and say you’re going to be more oil-focused, but the world is going to look for you in your next quarter to have oil production. So they are not just going to accept that you’re doing it; they are going to want to see some evidence that you’re doing it.

If you go to a new land sale that you never would have gone to before, and you need a piece of oil-weighted land and you need it fast so that you can drill it and get it on to production and show it up in your quarterly statements, then people pay up for that. Competition is changing a bit because of people’s new-found interest in oil…We have a very oil-weighted asset base. We’re not going to the story -- the story is coming to us.

Jean-Michel Gires, chief executive, Total E&P Canada Ltd.

(the Canadian division of the French energy giant, with assets in the oil sands)

There’s a big difference between major oil and gas companies and very small companies in the way we drill, the way we plan for the future. Especially when you’re in the big oil sands business, you need to plan for the long-term, and we have the capacity and the strength to do so without reacting positivity or negatively too much to short-term price fluctuations.

If I was in a different business, if I was producing Bakken oil, I would be drilling. I can understand that players being very active in the gas business would have pretty different strategies to follow. But I’m not in those businesses. We plan for the long-term and we organize for the long-term, but with major investments at stake – not smaller investments or drilling issues like those gas producers have to face on a monthly basis.

In the oil sands, because of the size of the investment and the cycle time, which is pretty long, you need to plan for the long-term. You cannot just overreact to the short term valuations, or maybe you should change businesses.

Trent Yanko, chief executive, Legacy Oil + Gas Inc.

(company created in July 2009 through a recapitalization and is now focused on light oil plays)

We try to take steps to mitigate inflation. We try to keep alliances with our service providers. For cost pressure, we had an opportunity to buy pipe when steel was low, and we did. We bought the majority of our 2010 program in advance – the casing and tubing. We’re doing that again right now. We were waiting for this day. It is an interesting milestone, but you have to still keep disciplined because it is still very volatile and that’s the one thing that we thought that was going to be going on here.

Oil may be going up, but the volatility? We used to see 50 cent or 20 cent swings back when it was $18 per barrel, and everyone was up in arms over the 20 cents. Now it can move two, three, four, five dollars in a day. You have to have projects that can work outside the current price otherwise the volatility could put you outside.

Corey Ruttan, chief executive officer, Petrominerales Ltd.

(Calgary-based company with extensive land holdings and fast-growing production in Colombia and Peru)

We’ve already been generating record cash flows here over the last few years. But [$100 oil] gives you much more cash-flow to reinvest in some of those potentially higher-impact, long-term type projects. It certainly also allows you to look at different reservoir opportunities than you might otherwise.

For example, as we move into the heavy oil fairway in Colombia, it makes that stuff even more attractive -- and more likely that we’ll be pursuing a commercial phase there over the coming few years. That will be important for our growth -- maybe not this year, but for the coming three years.

Tim Wall, president, Apache Canada

(energy producer and partner in Kitimat LNG project, which would export Canadian natural gas to Asia)

It definitely helps our LNG project, since a lot of [overseas natural gas] contracts reference an oil price.

But it’d be pretty tough on a lot of the drilling here if you were just gas. Having oil with a good commodity price gives you flexibility in doing some things on the oil side as opposed to the gas side. That said, [it helps develop gas, too], because a lot of these gas projects have [oil-like] liquid content. And just a bit of liquids at that kind of price really can make a project fly.