Canada, US Rig Activity Trending in Opposite Directions
Active rig counts in Canada and the US are trending in opposite directions, according to the latest Baker Hughes survey released July 24, with Canada’s count climbing steadily higher but activity in the US continuing a downward trend that began with the emergence of the Covid-19 pandemic in early March.
For the week ended July 24, Canada’s active rig count rose for the fourth consecutive week, with six gas-directed rigs and four oil-directed rigs boosting the national total to 42 from 32 the previous week. Gas rigs account for 76% of the total, oil rigs for 24%, Baker Hughes data shows.
In the US, however, the active count slid for the 20th consecutive week: the oil-directed fleet rose by one, but three fewer rigs were drilling for gas, dropping the national total to 251 from 253 the previous week. At the end of the first week in March, before the pandemic was declared and before the Saudi-Russia price war flared, 793 rigs were listed as active in the US.
Alberta has 28 of the 42 active rigs in Canada, with BC showing nine and Saskatchewan four. One offshore rig is active off Canada’s east coast.
While the Canadian onshore count relative to the 506-rig fleet in the country – based on data from the Canadian Association of Oilwell Drilling Contractors (CAODC) – yields an activity percentage just over 8%, that is a substantial improvement from the 3% rate recorded at the depth of the drilling slump in early June.
“June was the worst month we have on record at CAODC, and at just over 430 operating days we’re down 86% year-over-year on the drilling side,” the CAODC’s John Bayko told NGW. “With that in mind, any increase is going to be material just because the numbers were so low.”
And it perhaps bodes well for the rest of the 2020 drilling season: Kevin Neveu, CEO of Precision Drilling, Canada’s most active rig contractor, told a Q2 results conference call July 23 that Precision’s active rig count in Canada – 13 at the time of the latest Baker Hughes survey – is poised to climb through the balance of this year, led by the Montney and Duvernay shale plays.
“While forward visibility remains opaque, we see [our] rig activity moving towards the upper 20s late in the third quarter and believe this will trend into the 30s during the fourth quarter,” he said.
Precision’s drilling fleet is comprised of 109 rigs in Canada and 105 in the US, with another 13 operating internationally.