Drillers headed to record year in Canada; 46% increase expected in B.C.

Don Whiteley

Petroleum News contributing writer-Vancouver

The Petroleum Services Association of Canada is forecasting record drilling activity in Canada this year, including a 46 percent increase in British Columbia, the country's latest hot spot. The association's quarterly drilling activity forecast, released Aug. 5, is anticipating a total Canadian well count of 18,470 for 2003, an industry record and a slight increase from the previous forecast. The projected count includes approximately; 5,072 oil wells, 11,229 gas wells, 1,969 dry wells, and 200 service wells.

“Natural gas drilling continues to represents the majority of drilling at 62 percent of total wells,” said association President, Roger Soucy. “Although the second quarter was somewhat negatively affected by the weather there is currently a very high number of drilling rigs in the field, relative to this time of year, and it is expected to continue for the balance of this year.” In Alberta 13,435 wells are forecast, up from the 2002 count of 11,541. British Columbia is expected to reach 905 wells drilled in 2003, a 46 percent increase over last year. The association is predicting Saskatchewan could see record activity levels on the strength of heavy oil and shallow gas drilling. A total of 3,900 wells are to be drilled in that province in 2003, compared to 3,462 in 2002.

Soucy said the gains in British Columbia are particularly impressive, and he credits the provincial government's hard work on streamlining the regulatory framework in the province and bringing royalties in line with Alberta.

“There are three factors in British Columbia,” he said in an interview. “First, the government is making it more attractive to drill in the province; second, the geology is relatively untapped; and third, there are some very good prospects at a time when the commodity price is high.” EnCana is leading the charge in British Columbia with a C$700 million 2003 program to prove up its promising Greater Sierra discovery. The company has already increased production from Greater Sierra by 25 percent this year, and believes it can eventually produce gas at a rate of 400 million cubic feet per day.

EnCana's 2003 program includes a precedent-setting 70 wells drilled in the summertime, using specially designed wooden mats to support drilling equipment on what is usually very soft and wet ground.

“Record revenue and cash flow levels for the oil and gas producers coupled with continued high product demand and high reservoir depletion levels will maintain this record level of activity through the balance of this year and into the next,” said Soucy.

The Petroleum Services Association of Canada is a national trade association representing 250 member companies in the service, supply and manufacturing sectors within the upstream petroleum industry. It represents a diverse range of over 250 member companies, contracted almost exclusively to oil and gas exploration and production companies.