Canadian Drilling – Are We at the Bottom for Spring Break Up?

As of May 3, Baker Hughes reported that the Western Canadian gas directed drilling rig count fell by two to 60 (blue line in left hand chart below) and one greater than a year ago. For the oil directed drilling rig count, it rose four to 58 (red line in right hand chart) and 25 higher than a year ago. These latest changes appear to suggest that the seasonal downturn in activity that takes place around this time of year, referred to as spring break up, may have reached its low point. Break up is a seasonal slowdown in drilling activity, usually spanning early March to late April, and is associated with the end of winter when ground conditions begin to thaw and can slow or prevent the movement of large heavy equipment such as drilling rigs in certain regions. Confirmation that we have reached the bottom for break up could come next week if rig counts begin to rise.