November Rig Releases Up 2.2% From Last Year

For the second month in a row, wells rig released in Canada by operators exceeded the year ago number after falling well below 2006 levels for the January through September months.

Operators drilled 1,797 wells during November, slightly ahead of the 1,758 wells rig released for the same month in 2006. That follows an October count of 1,956 wells, up from 1,918 a year earlier.

Alberta, due to increases west of the fourth meridian, and British Columbia both had higher drilling levels this November than last year.

Total wells drilled this year in Canada are certain to come in below 20,000 for the first time since 2002 and exploratory drilling will be the lowest since 1998-1999.

[Figure 1]

For the first 11 months of 2007, 17,038 wells were rig released, a sharp 20.4% fall from 21,417 in the same period in 2006 and even further behind the record drilling year of 2005 when 22,455 wells had been drilled to the end of November.

Alberta’s drilling count fell 20% to 12,746 wells while British Columbia and Manitoba are both off 37% from last year with the former province at 798 wells to the end of November and the latter province at 287 wells versus 460 a year ago.

Saskatchewan operators drilled 3,143 wells over the first 11 months of 2007, an 11% decline from 3,545 last year.

In Ontario, companies drilled only 37 wells this year compared to 83 a year earlier.

Despite the overall increase in wells drilled for the month of November, exploratory drilling is still on the wane with only 225 exploratory holes rig released last month, the fewest for that month since 1998.

And for the first 11 months of 2007, only 3,218 exploratory wells were drilled, down 41% from last year and the lowest amount of exploration in Canada since 1999 when industry drilled 2,985 wells in its search for new oil and gas deposits.