More than 90% of today’s Western Canadian rigs are drilling horizontal wells
Western Canadian rig activity typically peaks in the winter, when the ground is frozen and rigs can move into areas they normally cannot access during the rest of the year, acccording to a National Energy Board press release.
Activity is lowest in the spring, when rigs are prevented from moving into new drilling locations due to the frozen ground melting and provinces enacting road bans.
Allowing for these seasonal fluctuations, low oil and natural gas prices have clearly caused western Canada’s rig activity to fall significantly over the past two years.
During the summer of 2016, the number of rigs drilling wells had fallen 50 per cent from 2015 summer levels, and over 60 per cent from 2014 summer levels.
In addition, the trend of rigs moving away from drilling vertical wells for conventional oil and gas development continued.
In the summer of 2016, an average of four rigs a week drilled vertically compared to an average of 80 rigs a week drilling horizontally.
After decades of development, western Canada’s conventional resources are already heavily drilled and many of the remaining prospects do not produce enough oil and gas to recover the cost of drilling them – especially with low prices.
Drilling activity is now concentrated where operators have their most economic prospects, which is largely in core areas of tight gas and tight oil production.
As a result, more than 90 per cent of today’s western Canadian rigs are drilling horizontal wells.
