This time of year is the peak of the drilling season, and the rig count is the leading indicator for the oil business. Here’s the rig report as of Valentine’s Day. While you were giving your sweetie flowers, these guys were turning to the right.
This time of year is the peak of the drilling season, and the rig count is the leading indicator for the oil business. Here’s the rig report as of Valentine’s Day. While you were giving your sweetie flowers, these guys were turning to the right.
When we see Canadian rig counts over +700 we can begin to relax, in the meantime the eco-wokes bitching and protesting about underfunded healthcare in the west can eat their unemployment checks.
Around 2013, there were over 800 drilling rigs in Canada, and we would see up to 600-700 at work in February. The oil downturn that hit in late 2014 and lasted 7 years saw something like 300+ of those rigs retired and cut up. As of today, there are 250 rigs at work in the whole country. I don’t have recent numbers on the entire fleet, but last I heard, it was headed towards 400 or so.
Drilling rigs today are now, on average, 2x as efficient as they were 10 years ago. And that’s with the same rig. Imagine if your pickup truck, which used to get 20 miles per gallon, 10 years later got 40 miles per gallon, WITH THE SAME TRUCK. That’s the reality in drilling today. They were forced to get much more efficient, and it worked half of the industry out of a job. I’ve written about it extensively over the years.
Precise analysis, I’ll look up some of your earlier work.
Brian, how does a rig become more efficient?
my $0.02 – It starts with retained professional employees from planning to operations & logistics – includes operators & third party service companies. Better production & completion technologies at all levels from mud management to completion and well stimulation technologies. Overhauled rigs with real time data information, along with mechanical automation – real time operation data available to engineering & supervisory teams at corporate offices. Safety & Operational policies/practices that maximize efficiency derived from over 100 years trial and error experience.
All of those things are important, but the people who own and operate the drilling rigs have told me it came down to two things – the universal adoption of the polycrystalline diamond cutter (PDC) bit and improved drilling muds. Additionally, a typical rig in southeast Saskatchewan went from one 800 horsepower mud pump to 2 pumps, up to 1100 or so horsepower each. There’s so much power from that, I’ve been told it’s almost, but not quite, like waterjetting. It’s not really waterjetting, but the volumes and power are incredible at the bit end. The rest of the rig has largely remained the same, although in recent years, most have adopted top drives, which is an improvement for certain situations. I wrote a lot about this for Pipeline News around early 2020. You can find it here: https://issuu.com/pipeline-news/docs/pipelinefebruary2020
Thank you.
Further down..
“TC Energy Corp. expects to be able to indicate this summer whether it will complete the Coastal GasLink pipeline by its end-of-year target or not.
The Calgary-based pipeline company, which has been dogged by unexpected construction issues and rising labour costs for the project, said earlier this month that it has raised the estimated cost of the pipeline to $14.5 billion, up from an earlier estimate of $11.2 billion.”
What was the Trudeau Governments estimate?
Impossible to miss the graft and incompetence.
John, I recall a figure of $4.5 billion, but can’t remember if that was the purchase price, the completion estimate, or what.
You are mixing up Coastal GasLink with Trans Mountain Expansion. Totally different projects, but both in BC.
Right.
“Drill, baby drill!” in the USA = gas prices go down.
“Drill, baby drill!” in Canada = gas prices go up.
Yes but it also means a steady supply at the pump.
These numbers are meaningless without some sort of context, like last year this time, or average year.
Is 32 rigs drilling a boom or a bust? Only industry professionals would know from this article.
Here is a simple chart going back 20 years “all” tab. There are plenty of other sources going back much further…
https://boereport.com/baker-hughes-rig-count/
PS: the low dips each year coincide with spring “breakup” as road bans are implemented and overweight equipment can’t travel thawing roads – reference the 75% road ban signs you see on rural roads each spring. Many operators do utilize legal workarounds for moving heavy equipment to and from fields to stay somewhat active during this time period…………