Canadian rig utilization opens 2005 at 93 percent

Armed with fattened capital budgets and well permits, Canadian E&P companies have come blazing out of the gates this year.

For January, the utilization rate for 720 available rigs was a near-record 93 percent — just missing the 94 percent performance in January 2001, although at that time the rig fleet was only 625.

Alberta logged 481 active rigs, up from 418 a year earlier, but British Columbia edged down to 140 from 154.

For the last week of January, the count included five rigs at work in Northern Canada.

Adding to the confidence level for the rest of 2005 are indications of a 12 percent hike in capital budgets, with 57 of the largest companies planning to spend a combined C$30 billion, based on forecasts of continuing strong commodity prices.

Leading the pack are Suncor Energy and Shell Canada, with increases from 2004 of C$80 million and C$700 million, respectively.

Talisman Energy is up C$404 million, Petro-Canada C$300 million and Husky Energy C$200 million.

Burlington Resources Canada Energy is one of the few Canadian units of U.S.-based parents to target a major spending increase.

With more than 50 rigs currently at work, it expects to pour US$975 million into about 900 wells, up from last years 780 at a cost of US$842 million and 737 wells at a cost of US$715 million in 2003.

Others are anticipating sharp declines, such as Murphy Oil and Anadarko Canada, both of whom made large-scale asset disposals in 2004.

—Gary Park