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Oil tanks stand near Fort McMurray, Alberta.

Ben Nelms/Bloomberg

There's a palpable anxiety in downtown Calgary that the end of summer could bring a repeat of last year, when the energy downturn entered a more dire phase.

September barged into Alberta with an economic sucker punch. On the first day of the month, at least three oil companies announced layoffs, putting 1,000 people out of work. A bunch more slashed their operating budgets. This was as crude prices bounced around in a range similar to today's.

This came just a few months after it appeared a recovery was at hand.

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Oil markets are uncertain again, as prices edge up on the back of little hard data, and energy company executives are preparing for the autumn round of meetings with lenders to determine the stability of their borrowing bases. The ones in the spring proved painful.

If there's any consolation, the worst seems more likely to be over this time. Oil and gas prices are hanging well above the levels of last winter, when producers were forced to take drastic measures to deal with dwindling cash flows and shrinking credit lines.

When U.S. crude slumped to just above $26 (U.S.) a barrel in February, the industry stopped spending money on expansion. Jobs were cut, dividends were cancelled and assets were put on the auction block, all to stay on side with the terms tied to debt.

In many cases, it was to no avail. Small and mid-size producers had their credit lines cut along with a drop in value for their reserves, some to levels under what they had already borrowed.

The high-debt predicament prompted recent acquisitions, including the still-contentious takeover of Twin Butte Energy Ltd. by Hong Kong-based Reignwood Resources Holding Pte. Ltd. and Seven Generations Energy Ltd.'s $1.9-billion (Canadian) purchase of Paramount Resources Ltd.'s Alberta gas assets.

It also drove some harder-hit players, such as Spyglass Resources and Exall Energy, to bankruptcy court. In the energy-services business, onetime family-owned fracking titan Sanjel Corp., was carved up in receivership. Tervita Corp. said this week it was missing an $18.2-million (U.S.) interest payment on its senior notes, opting to enter a 30-day grace period it will use to negotiate a recapitalization.

It's an open question whether more debt-driven deals are on tap once the kids are back in school and banks study their oil and gas price forecasts to gauge their exposure to the industry as it enters its third year in the tank.

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On the employment front, the foreign-based oil majors have already cut deep into their Canadian payroll, as the country's high-cost operations fell several notches on global priority spending lists. They have given no indication that retrenchment is over. Only last month, Houston-based ConocoPhillips cut 300 jobs, representing 14 per cent of its Canadian unit work force, in a third round of reductions within 18 months.

Playing in favour of the industry is that companies that have come through the slowdown in relatively good financial health are as lean as they've ever been, so costs have dropped dramatically. That will mean rewards if commodity prices are slowly recovering, and clearly there are those in the market who believe they are.

The Toronto Stock Exchange's oil and gas subindex has climbed to levels not seen in more than 13 months. West Texas intermediate crude has climbed 18 per cent in the past two weeks, settling on Tuesday at $46.58 a barrel, as some market players are mesmerized by the siren song of Organization of Petroleum Exporting Countries ministers holding out hope of potential action to limit production.

There's a big bet against that. Many analysts forecast a return to supply and demand balance in global markets some time in 2017, and a mountain of short positions in New York Mercantile Exchange light crude contracts shows a large contingent wagering on another drop before that begins to take effect.

It all adds up to a big focus on September again for Alberta. If oil prices are rising on something other than hope, there will be a whole lot fewer reasons to fear it.

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