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Gas hunters bust Canada records
Gary Park Petroleum News Calgary correspondent
Canada’s three western provinces are soaring to new heights, issuing a flurry of gas well permits that point to a hectic winter drilling season, but the records are no guarantee that output will climb, says a geologist with the Geological Survey of Canada.
Alberta, Saskatchewan and British Columbia regulators licensed 11,006 gas wells to the end of August, 53 percent ahead of the 7,207 permits issued in the same period of last year and a new benchmark for the industry.
August alone set a blistering pace, with 1,948 permits approved across Canada, beating the previous record of 1,727 in August 2000.
For the first eight months, 16,406 oil and gas well permits were authorized for all of Canada, 50 percent ahead of the comparable pace last year and up 15 percent from the January-August record of 14,325 in 2001. EnCana’s lead grows EnCana continued to stretch its lead over other operators with 352 permits in August, lifting its year-to-date total to 3,754, four times that of its nearest rival Canadian Natural Resources, with 935 permits.
On top of the permit records, Calgary-based investment dealer FirstEnergy Capital has raised its 2003 forecast to 20,068 well completions in Western Canada from its earlier 18,462, largely because gas prices have remained high.
If gas targets account for 60 percent of the activity that will put the year’s tally at about 12,000, but the Geological Survey’s David Hughes said that even 12,000 gas well completions a year for the next few years will not be sufficient to replace Canada’s dwindling production.
He told the Canadian Society of Petroleum Geologists that although E&P companies have tripled their well completions over the past decade, production has only edged up by 10 percent.
He said North America is facing a serious gas supply crunch, which Canada is unlikely to be in a position to solve.
Hughes said about 100,000 exploration wells have been drilled so far in the Western Canada Sedimentary Basin, discovering about 26,000 pools, but since the 1980s the number of new field wildcats has tapered off.
First-year decline rates for new wells has climbed to 25 percent in 2002 from 13 percent in 1992, or almost 3.5 billion cubic feet per day, which means producers must replace the equivalent of five Ladyfern discoveries each year just to maintain current production.
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