The total number of wells drilled in Canada in 2009 fell to 8,360, the lowest mark since 1992 and about half the 16,362 in 2008. Alberta’s 2009 well count fell 50.4% to 5,802 wells from 11,687 a year earlier, while Saskatchewan operators rig-released 1,761 wells, 56% lower, and B.C. was down nearly 34% to 563 wells. From 10,000 to 15,000 jobs were lost in 2009 by the members of the Petroleum Services Association of Canada. The worst may be over.
Reasons for the decline in drilling activity are obvious. A worldwide recession for the most part of 2009 resulted in a reduced demand for natural gas and an increase in inventories in natural gas resulted in a natural gas price crash. The industry has gone through a structural change that will remain with the natural gas industry forever.
Research analyst Chris Theal of Macquarie Securities was referenced as stating “low commodity prices in the first part of 2009 slowed even the hot Saskatchewan Bakken oil play, leaving activity only in low-cost unconventional gas plays in Western Canada.”
But that was for 2009, and there are many looking to 2010 with optimism. An increase in activity started at the end of 2009, and many expect there to be increased activity through 2010 as well. Peters & Co. updated its 2010 forecast to 11,000 wells in Western Canada and this week estimated the 2011 well count will reach 12,500 with Western Canadian drilling fleet utilization rates grow from 40% this year to 45% in 2011.
Calgary Herald: Canadian oil and natural gas drilling falls to 18-year low