Canadian Drilling – Rig Counts Continue to Feel the Heat of Spring Break Up

For the week ending March 28, Baker Hughes reported that the Western Canadian gas-directed rig count fell seven to 54 (blue line and text in left hand chart below), 21 less than one year ago and its second lowest point this year. The oil-directed rig count retreated nine to 107 (red line and text in right hand chart), 32 more than a year ago and its second lowest this year. The additional pullback in rigs continues to follow a seasonal pattern known as spring break up, when drilling and rig movement activity is reduced due to restrictions on the movement of heavy equipment in some regions because of the thawing of surface conditions. Depending on weather, rig counts may not bottom out until late April.