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Canadian drilling faces small dip in 2014 outlook New technology means more footage with fewer wells; hydraulic fracturing code of conduct released; 11 companies have signed on Gary Park For Petroleum News
The Petroleum Services Association of Canada has placed a slight damper on the drilling outlook for 2014.
It has forecast 10,800 wells will be drilled, down 1.5 percent from the final tally of 10,960 expected for 2013.
The provincial breakdown for next year points to 6,555 wells in Alberta, a drop of less than 1 percent from the count anticipated for 2013; Saskatchewan 3,196 wells, off 3.5 percent from 2013; British Columbia 550 wells, up 2.2 percent; and Manitoba 480 wells, a slide of 7.7 percent.
PSAC based its targets on a 2014 commodity price forecast of C$3.50 per thousand cubic feet of natural gas at the AECO hub and US$95 per barrel for West Texas Intermediate crude.
PSAC President Mark Salkeld said his organization is “slightly optimistic” about gas prices toward the end of 2014, but does not see that resulting in higher drilling levels.
“An even more significant factor affecting drilling activity across Canada is the widespread and growing use of technologies such as hydraulic fracturing and horizontal drilling — technologies that were once considered advanced innovations.
“Quite simply, large-scale use of these kinds of technologies is creating a trend to fewer wells overall,” Salkeld said.
“By maximizing our use of technology, industry can increase production from existing wells, access more and deeper zones, and restart production from wells that have been shut in,” he said.
“This means we can maintain or even increase production, while drilling fewer new wells. In fact, one well today can be the equivalent of two, three or more wells drilled just 10 years ago.”
Salkeld noted that “given the nature of the wells being drilled” the overall total of meters, expected to gain 500,000 this year, is playing a “very significant role in overall activity.”
Incoming PSAC Chair John Gorman said well counts have remained stable in Canada over the past two years, although the wells being drilled are longer and more complex.
What is a more pressing need is for Canada to sell its resources more widely in the global market.
Fracturing code released Following six months of community consultation, the industry group released a code of conduct for hydraulic fracturing in the Canadian oil and gas service sector, laying out standard practices for sound technical and environmental performance.
Salkeld said that working closely with stakeholders is critical to building trust in oil and gas operations and responding to public concerns over the fracturing methods.
So far, 11 companies contributed to writing the code and have voluntarily agreed to comply with the terms.
Brian Fedora, chief executive officer of Canyon Technical Services, said that unless the companies conduct “responsible operations (we’re) really out of business in Canada.”
Meanwhile, member companies of the Canadian Association of Oilwell Drilling Contractors, have reported that 73,376 operating days were booked in the first nine months of 2013, down from 82,295 for the same period of 2012, but the total number of meters drilled rose to 16.3 million from 15.86 million and wells averaged 1,981 meters, an increase of 43 meters from a year earlier.
CAODC member companies took an average of 8.9 days to drill a well in the first nine months of 2013 compared with 10.10 days last year.
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