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Natural gas producers’ profits will sink to worst loss since 2009, Conference Board warns

In a report Tuesday, the Conference Board estimated domestic natural gas companies would post an aggregate pre-tax net loss of $1.5 billion this year, making 2015 the least profitable year for the industry since the dramatic collapse in gas prices in 2009.

CALGARY – The Canadian natural gas industry is expected to post its worst collective loss since 2009 this year, a new report from the Conference Board of Canada predicts, the result of both the fall in natural gas prices and the price collapse for related commodities such as propane and butane.

“We do see, potentially, some employment reductions coming in the next year,” Conference Board economist Carlos Murrillo said of the natural gas sector, adding that companies will be looking at all possible methods to cut costs.

In the same way that oil producers have laid off staff or reduced salaries, renegotiated drilling costs with service providers and cut back on other expenses through this year, Murillo said he expects gas producers will follow a similar strategy in 2016. He expects the sector to return to profitability by the end of that year.

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