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Oil makes a comeback in drilling
Gary Park
Oil has partly emerged from the shadows of natural gas, logging more than 400 well completions in January, only the second time in 20 years that the mark has been passed in the opening month of the year.
Saskatchewan showed the strongest gains, completing 156 oil holes compared with 98 a year earlier, while overlooked Manitoba recorded 43 completions, up from 12 in January 2005. Alberta remained the pace setter at 226 completions, up 17 from the same month of 2005.
But natural gas drilling remained the dominant activity, accounting for 1,156 of the 1,645 well completions, down from 1,739 in January 2005 but ahead of the 1,403 recorded in January 2004. Concentration on coalbed methane The outlook for 2006 is heavily concentrated on coalbed methane, with First Energy Capital predicting spending could exceed C$1.5 billion on 4,200 coalbed methane wells — up 40 percent from 2005 and far ahead of the 3,500 predicted by the Petroleum Services Association of Canada.
Of the leading coalbed methane players, EnCana has budgeted spending of C$545 million on 1,060 wells, Trident Exploration expects to invest C$450 million and MGV Energy has a C$143 million budget for 450 gross and 260 net wells.
Coalbed methane output in Alberta was estimated at 300 million cubic feet per day entering 2006 and MGV has calculated that volumes from the Horseshoe Canyon area may now be close to 500 million.
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