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Upstream sector still on fire Record well permits issued in Canada in first half; land sales robust Gary Park Petroleum News Calgary Correspondent
Fueled by high oil and natural gas prices, land sales and well permits continue at a robust pace in Canada, pointing to a boom drilling year.
Regulators authorized a record 12,269 new wells — 8,115 targeting gas prospects — in the first half of 2003, surpassing the 2001 record by 11 percent, while auctions of government land fetched C$630 million, compared with C$395 million to the mid-point of 2002, but lagging well behind the 2001 record of C$957 million.
But drilling activity is “picking up speed, even beyond out expectations,” said Don Herring, president of the Canadian Association of Oilwell Drilling Contractors.
The association is confident the year’s well count will reach about 17,500, short of the 2001 benchmark of 17,945.
It said the 418 rigs currently operating in Western Canada beats its expectations by 12.3 percent, reflecting industry confidence that commodity prices are not about to weaken. Land sales top last year by more an a million acres Land sales to the end of June this year tallied 5.93 million acres for all of Canada, compared with 4.69 million acres for the same period of 2002, with average prices per acre rising 35 percent.
Work bids for the Northwest Territories contributed C$1.98 million for 272,329 acres, a sharp drop from last year’s C$14.3 million for 116,400 acres.
However, the three major producing provinces in Western Canada all attracted a lively response.
Alberta’s treasury swelled by C$409.5 million for 3.77 million acres, a strong recovery from last year’s C$244 million for 3.48 million acres.
British Columbia sold 706,820 acres for C$134 million, little changed from 2002’s C$126 million and 715, 6701 acres.
Saskatchewan, bolstered by a flurry of shallow gas drilling, collected C$86 million from 1.36 million acres, far outpacing last year’s C$24.5 million and 458,098 acres. More than a quarter of well permits exploratory Of the well permits awarded by regulators, 26 percent were exploratory, roughly matching the levels of recent years.
In addition to the 8,115 gas wells, 2,984 permits were for oil prospects, with the remaining 1,170 designated as service wells and dry holes.
Coalbed methane well permits showed steady advances in Alberta, with a year-to-date total of 145, while bitumen wells accounted for 697 licenses.
Leading the way among operators were EnCana 3,098 permits, Canadian Natural Resources 875, Husky Energy 666, Apache Canada 563 and Burlington Resources Canada 410.
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