Canadian Drilling – Rig Counts Head Lower, Early Arrival of Spring Break Up?

For the week ending March 7, Baker Hughes reported that the Western Canadian gas-directed rig count fell seven to 64 (blue line and text in left hand chart below), 20 less than one year ago and the lowest since the start of the year. The oil-directed rig count also dropped seven to 168 (red line and text in right hand chart), 27 more than a year ago, 27 higher than the top of the five-year range, and its lowest value since the start of the year. The pullback in both rig counts may be pointing to an earlier than usual start to spring break up, a time of year when drilling and rig movement activity is reduced due to restrictions on the movement of heavy equipment in some regions as the result of the thawing of ground conditions. Weather in Western Canada has been extremely mild with the most recent two weeks being the second warmest since 1900 for British Columbia and the warmest since 1900 for Alberta.