Soggy weather dampens drilling forecast

An early spring thaw followed by flooding and record rainfall in parts of Alberta has lowered the target for Canadian well completions this year.

In an updated forecast, the Canadian Association of Oilwell Drilling Contractors has trimmed its forecast to 24,099 completions — still 9 percent ahead of 2004’s record count — from the 24,205 it predicted last fall.

Canada is expected to end 2005 with 780 rigs, an increase of 46 from mid-year.

The association reported that an average 598 rigs of 723 were active in the first quarter, short of its projected 613 of 730 rigs, thus reducing operating days to 45,681 from 47,697.

Rig utilization is expected to average 280 in the second quarter, 483 in the third and 575 in the final three months, yielding an average 484 working rigs from a fleet of 742.

The drilling contractors group bases its forecast on an oil price of US$45 per barrel of West Texas Intermediate and US$6.12 per thousand cubic feet on the New York Mercantile Exchange — both estimates the association says are conservative.

Industry figures show 2,001 wells were completed in May, a gain of 56 percent over a year earlier, pushing the five-month tally to a record 8,889 wells compared with 8,464 in the same period last year.

Alberta logged 6,956 wells, a gain of 6.8 percent from 2004’s 6,515; Saskatchewan was unchanged at 1,104; and British Columbia lagged behind at 840, down 32 completions. Northern Canada also dipped to 14 from 17.

—Gary Park