For the week ending August 16, Baker Hughes reported that the Western Canadian gas-directed drilling rig count fell three to 66 (blue line in left hand chart below) and four less than a year ago. For the oil-directed drilling rig count, it rose four to 147 (red line in right hand chart), 29 more than a year ago, 11 above the top end of the five-year range, and is at its highest level since February 2023. The pullback in the gas rig count may be reflecting the intentions of numerous gas-levered producers that have announced deferrals to drilling programs as a result of very weak natural gas prices. The strong oil rig count underscores 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.
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- Analyst Insight
Canadian Drilling – Oil Rig Count Pushes Higher, Gas Rigs Headed Nowhere
Canadian oil related drilling has pushed to a 17-month high thanks to drilling in the oil sands and other heavy oil; gas rigs are going nowhere as producers remain reluctant to commit to higher levels of activity until there is a recovery in gas prices.
- Analyst Insight
Canadian Drilling – Oil Rig Count Holding Strong, Gas Rigs Dull as Dishwater
The Canadian oil rig count remains strong and well above the five-year average range. More pipeline capacity and solid oil heavy oil prices continue to incentivize oil drilling, especially in the oil sands. Gas rigs remain dull, unable to break out to the upside as gas producers continue to hold back activity in the face of very weak gas prices.
- Analyst Insight
Canadian Drilling – Oil and Gas Rig Counts Little Changed
Canadian drilling was little changed in the latest week. Gas drilling has shown little movement for months in light of extreme weakness in natural gas prices. Oil drilling remains above the five-year range.
