Canadian Drilling – Oil Rig Count Holding Strong, Gas Rigs Dull as Dishwater

For the week ending August 30, Baker Hughes reported that the Western Canadian gas-directed drilling rig count rose a single rig to 67 (blue line in left hand chart below) and five less than a year ago. For the oil-directed drilling rig count, it was unchanged at 149 (red line in right hand chart), 35 more than a year ago, eight above the top end of the five-year range, and remains at its highest level since March 2023. Little change in the gas rig count reflects very poor pricing conditions in the Canadian natural gas market with gas-levered producers announcing deferrals to drilling programs and unwilling to commit to higher activity. The strong oil rig count underscores oil-levered producers’ desire to further expand production, primarily heavy oil and oil sands related, and capitalize on additional egress capacity provided by the Trans Mountain Pipeline expansion.