News tidbits relating to Oil Sands companies and developments: 

BA Bites The Bullet
BA Energy Inc., the privately owned developer of the $4-billion Heartland Upgrader near Edmonton, Alberta, became the first oil sands company to file for bankruptcy. The decision to throw in the towel was reportedly due to the company's inability to payoff a loan, which triggered the potential recall of a US$507 million loan by lender Credit Suisse.

Energy Giants Step Back From The Oil Sands
The BA Energy bankruptcy filing is just the latest in a string of disappointing announcements to come out of the Alberta oil sands in recent months. Slumping oil prices have forced a major re-think on many billion-dollar projects designed to coax more oil from the sands over the next decade.

So far, energy giants like Suncor Energy (NYSE: SU ), Petro-Canada (NYSE: PCZ ), Royal Dutch Shell (NYSE: RDS.B ) and StatoilHydro (NYSE: STO ) have announced plans to either delay or scrap projects that would have increased production or upgrade the sticky bitumen into light sweet crude.

Huge Spending Slump Projected For 2009
The prospect of oil prices remaining low for some time also appears to be prompting a re-evaluation of prospects for the oil sands by analysts. Recently, Suncor stock was  downgraded to “sector perform” by major Canadian investment dealer RBC Capital Markets. And overall spending on oil sands projects in 2009 is expected to be chopped by a dramatic 50% compared to last year according to Calgary-based First Energy Capital.

The Bottom Line
According to Goldman Sachs, new Canadian oil sands projects need a crude price of about $85 a barrel to breakeven. Until oil prices get back to those levels, it's unlikely that the existing oil sands producers will be able to materially grow their production. For the time being they're basically stuck in their own pits. (Learn more about this volatile sector, in our Oil And Gas Industry Primer .)