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CBM underpins hopes of record drilling Petroleum Services Association of Canada predicts 25,290 completions in Canada in ’06, a fourth straight record-setting year Gary Park Petroleum News Canadian Contributing Writer
Coalbed methane will make the difference as Canada’s field contractors prepare for another record drilling season in 2006.
The Petroleum Services Association of Canada predicts a record 25,290 well completions next year, easily surpassing its latest forecast of 23,890 wells — 1,700 more than its original target — and setting a fourth straight benchmark year.
The outlook is based on average crude oil prices of US$60 per barrel WTI and gas prices at the AECO hub, Alberta’s largest export point, of C$9.50 per thousand cubic feet.
Investment dealer FirstEnergy Capital is aiming higher, setting a goal of 26,200 wells in 2006 and 24,200 this year.
PSAC President Roger Soucy said his organization’s prices are “well above anything that is required to maintain the level of activity that we have.”
He said commodity prices could ease off “quite a bit” and have only a marginal affect on activity.
For both years, natural gas will account for about three-quarters of the total wells, lifted by coalbed methane wells which are projected to tally 3,500 in 2006, compared with 3,000 this year and 1,000 in 2004.
In the process Soucy expects coalbed methane production to “ramp up fairly significantly” from current levels of about 180 million cubic feet per day. Sedimentary basin expected to remain flat Despite the high level of gas drilling, however, it is unlikely that production from the Western Canada Sedimentary basin will reverse the trend of flat or declining output in recent years.
Alberta will easily remain the industry’s powerhouse, accounting for about 20,000 of next year’s wells, up 60 percent from 2005 and including the bulk of coalbed methane drilling.
Saskatchewan’s well count will be largely unchanged from this year at 3,430, but British Columbia could see a 20 percent surge to 1,600 wells, concentrated mainly in the gas-rich northeastern plains and foothills of the Canadian Rockies.
Soucy said British Columbia is “becoming a favorable location for oil and gas activity and with the move towards southern B.C. (for coalbed methane) we are expecting a significant elevation in activity levels there.”
He said the British Columbia government’s efforts over the last four years to entice drilling, offer summer incentives and expand infrastructure in the northeast are a major contributor to the province’s success.
Soucy said British Columbia has the added appeal of an unexplored resource area offering the potential for quality wells that can produce for many years.
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