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Natural gas trims Canada’s upstream
The leading edge of an expected sharp downturn in Canadian drilling activity next year is making an early appearance, with well completions struggling to remain ahead of 2005 and new well permits starting to lag.
Shallow gas and coalbed methane wells, which are expected to have the greatest negative influence on 2007 numbers, have shown a marked decline since June.
Preliminary industry statistics for the first 10 months indicate almost 17,400 wells were completed, 3 percent more than the same period of 2005, but a dramatic slump from the first quarter when completions were up 21 percent.
Natural gas retained its dominant role, claiming about 70 percent of all completions, but oil made some bold gains to 4,200 wells from 3,370.
The shift from gas to oil was reflected in a 14 percent increase in the average 6.41 operating days per well, boosting the total for the January-September period by 14.5 percent to 113,295 days.
Fleet expansion rebounds on contractors Continued expansion of Canada’s rig fleet rebounded on contractors, who completed an average 21.8 wells per rig in the first nine months compared with 23.5 wells a year earlier.
One of the strongest barometers of future intentions showed up in the 10-month total of well permits issued by regulators across Canada, with the total edging down to 23,610 from 23,905 at the same time last year.
The combined natural gas well tally (including coalbed methane) for Alberta, British Columbia and Saskatchewan took a dive to 15,042 from 16,978, the lowest count since 2003.
But the return to oil limited Alberta’s overall 10-month decline to 18,078 well approvals from 18,383 a year earlier, with conventional oil licenses up to 2,148 from 2,045, while bitumen permits were virtually unchanged at 1,121.
The biggest hit in Alberta occurred in coalbed methane plays, where permits slumped to 1,957 from 2,486, off 21 percent, and conventional gas slipped 9 percent to 10,503.
—Gary Park
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