All-time drilling high forecast for Western Canada

Gas demand driving both deeper and shallow wells, 62 percent of 18,300 wells

Gary Park

Petroleum News Calgary Correspondent

A wash in a gusher of first-quarter profits, Western Canada’s E&P sector seems ready to put a large chunk back in the ground.

The Petroleum Services Association of Canada, in its mid-year updated forecast, said April 24 that it now expects 18,300 wells in 2003, edging out the 2001 record by 45 wells and beating its earlier forecasts for the year, starting at 16,500 wells and revised in January to 17,500 wells.

The new total includes 11,352 gas wells, 5,089 oil wells, 1,654 dry holes and 205 service wells, with gas accounting for about 62 percent of the total.

For Alberta, the association is predicting 13,335 wells, up from last year’s 11,541; 3,900 wells for Saskatchewan compared with last year’s 3,462; and 855 wells for British Columbia, against 2002’s 549 wells, with the balance going to the Northwest Territories and Manitoba.

“Increases in the demand for gas continue to drive the high number of deeper prone gas wells drilled in the foothills (of the Canadian Rockies), northern Alberta and northeastern British Columbia,” said association President Roger Soucy.

He said the number of shallow gas wells drilled in the fourth quarter of 2002 and the opening quarter of 2003 “pushed our forecast over the top. We do not see this trend coming to an end any time soon as strong commodity prices and high demand are expected to continue.”

C$8.1 billion on drilling

For the first quarter, the association reported 5,438 wells drilled, falling 223 wells short of the record for the three months set in 2001.

But Soucy noted that a continuing shortage of skilled rig hands may prevent the industry moving into high gear.

“Something like 150 drilling rigs this winter had only two crews, where normally they’d have three and there were three or four dozen rigs that didn’t even make it out of the yards because there were no crews,” he said. The disappearance of family farms in Western Canada has eliminated a large portion of the industry’s traditional workforce for the peak winter season, Soucy said.

In addition, the service industry is having to compete with forestry, construction and oil sands sectors for the same type of worker. “We cannot continue to hire and lay off and train people because we’re going to hit a brick wall pretty soon,” Soucy said.