Projected well count rises

Exceptionally busy drilling activity during the second quarter has prompted the Canadian Association of Oilwell Drilling Contractors to boost its projected well count for 2014.

Exceptionally busy drilling activity during the second quarter has prompted the Canadian Association of Oilwell Drilling Contractors to boost its projected well count for 2014. The drilling and service rig industry trade association announced on Wednesday that it now anticipates 11,494 wells will be drilled in Canada this year, which would mark a six per cent increase over 2013. In November, CAODC was forecasting a 2014 tally of 10,604 wells. A release issued by the association said its more bullish outlook reflects higher-than-expected activity levels during the April-to-June period.

“This is the strongest second quarter we’ve seen in seven years,” said CAODC president Mark Scholz.

Industry operating days during the three months are expected to exceed 17,000. That compares with a recent low of 8,411, in 2009.

“Stronger gas prices have increased cash investment to the industry,” said Scholz of the jump in drilling.

Typically, drilling activity in the oil and gas sectors peak in the first quarter. They then drop with the arrival of spring breakup, before strengthening in the third and fourth quarters. CAODC said rig utilization in Western Canada during the first quarter of 2014 averaged 64 per cent, with 521 rigs out of a fleet of 809 active. Operating days totalled 44,721. The second quarter is projected to have a 23 per cent utilization rate, with 17,342 operating days; the third quarter 45 per cent, with 33,818 operating days; and the fourth quarter 48 per cent, with 36,072 operating days.

“Oil and gas producers are benefitting from investor optimism,” said Scholz. “And that means more wells will be drilled.”

CAODC represents 44 drilling contractors, two offshore contractors, 83 service rig contractors and 210 associate division members.

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