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Canada posts dismal well-license year
Gary Park For Petroleum News
The verdicts keep rolling in and they’re not pleasant: Canada’s natural gas sector is in a hole that continues to deepen.
In the latest evidence of the sector’s plight, regulators issued 12,740 licenses for gas-targeted wells in 2007, down from 18,270 in 2006 and the peak year of 21,503 in 2005.
Conventional oil and bitumen also took a bruising, falling 10 percent from 2006 to 6,486.
All that rescued the industry from a dismal outlook was a late rush to obtain permits for oil sands evaluation-test wells in Alberta, pushing the 2007 total to 5,117, up from 3,892 in 2006 and 2,113 in 2005.
December accounted for a startling 2,685 oil sands wells, with nine companies obtaining approvals for more than 100 wells each. That field was led by UTS Energy at 361, Athabasca Oil Sands 311, Synenco Energy 292 and Connacher Oil and Gas 201.
Bolstered by the oil sands, combined permits for December were 4,490, up 25 percent from a year earlier, but the conventional side posted a 26 percent drop to 1,805 and was down 12 percent for the final quarter to 5,712.
Excluding sands, lowest level in 5 years Excluding the oil sands, the well license tally hit its lowest level in five years at 19,759, off 34 percent from the 2006 count of 29,901 and 36 percent from the 2005 record of 30,917.
Not all of the licenses are drilled within their 12-month term and a large number are cancelled each year.
Experiencing its worst year since 2002, Alberta issued 19,825 conventional and oil sands permits, down 15 percent from the previous year’s 23,210, which was off 3.5 percent from the record 24,038 in 2005.
Conventional gas recorded a 32 percent decline to 8,633 from 12,604 in 2006 and 41 percent from 14,559 in 2005, reinforcing industry unhappiness with the outlook in Alberta and concerns about when shrinking gas supplies will take their toll.
Coalbed methane drilling had its second year on the skids, dropping to 1,795 well approvals from 2,397 in 2006 and 3,106 in 2005.
The heaviest toll occurred in the gas-prospective regions of southeastern Alberta, the Foothills and the central area, with the southeastern shallow gas plays continuing a slide to 5,881 from 7,236 in 2006, 8,556 in 2005 and 9,043 in 2004.
British Columbia’s permit counts were also its lowest since 2002, totaling 1,168, a drop of 30 percent from 1,673 in 2006 and 37 percent from the benchmark 1,857 in 2005.
Saskatchewan had its worst year since 2001, issuing 3,831 licenses, with gas tumbling to 1,191, trailing the 2002 record of 2,776 by 57 percent. Oil-targeted permits were 2,451, the third highest this decade behind 2006 and 2000.
Elsewhere, the Northwest Territories licensed 11 wells, up from six in 2006; Manitoba dropped to 335 from 446; New Brunswick climbed to 14 from 13; and Prince Edward Island approved two licenses compared to none in 2006.
EnCana easily retained its title as the leading operator, with 4,013 permits up from 3,631 in 2006. Husky Energy dropped 278 to 1,191; Canadian Natural Resources declined 688 to 1,167; EOG Resources was off 379 at 798; but Devon Canada increased 136 to 725. ConocoPhillips Canada had the largest drop in conventional licenses to 369 from 1,069.
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