Canadian Drilling – Race to the Bottom as Spring Break Up Approaches Its Conclusion

As of April 19, Baker Hughes reported that the Canadian gas directed drilling rig count fell by four to 67 (blue line in left hand chart below) and four more than a year ago. For the oil directed drilling rig count, it fell 10 to 58 (red line in right hand chart) and 17 higher than a year ago. These latest declines are consistent with the typical pullback in activity at this time of year referred to as spring break up. 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. The bottoming out of the rig count usually occurs around the end of April, although this can vary depending on ground conditions in each region.