Canadian Drilling – Rig Counts Search for the Bottom with Spring Break Up in High Gear

As of March 28, Baker Hughes reported a net decline of three for the Canadian gas directed rig count to 75 (blue line in left hand chart below) and six lower than a year ago. For the oil directed rig count, it also fell to 75, a net loss of 16 for the week (red line in right hand chart), but 17 higher than a year ago. The latest weekly downturn for oil and gas rigs is part of the annual spring “break up” period, a seasonal slowdown in activity associated with the end of the winter drilling season when ground conditions begin to thaw and which slows or prevents the movement of large heavy equipment such as drilling rigs in certain regions. Traditionally, this period affects oil rig counts to a much greater degree than gas rig counts and typically sees a bottoming out around the end of April, although this can vary depending on ground conditions in each region.