Canadian Drilling – Mid-Summer Stall

For the week of August 1, Baker Hughes reported that the Western Canadian gas-directed rig count fell one to 53 (blue line and text in left hand chart below), 16 less than one year ago and the lowest for this time of year since the COVID-driven lows of 2020. The oil-directed rig count fell four to 123 (red line and text in right hand chart), 23 less than a year ago and the lowest for this time of year since 2023. Momentum behind additional gains in rig counts could remain muted for the rest of the summer as producers remain cautious on the deployment of capital spending, especially with several gas-levered producers recently noting that they have shut-in production in response to painfully low natural gas prices in Western Canada (see our Analyst Insight of July 30).