Canadian Drilling – Springtime Blues: Rig Counts Still Not Ticking Higher

For the week of May 30, Baker Hughes reported that the Western Canadian gas-directed rig count remained unchanged at 43 (blue line and text in left hand chart below), 11 less than one year ago and at its lowest point this year. The oil-directed rig count ticked two lower to 67 (red line and text in right hand chart), four less than a year ago, only the second time this year that it has been lower than last year, and just above the five-year range. The contra-seasonal move in rig counts could be linked to wet spring conditions in some parts of Alberta and the potential that wildfires in northeast Alberta are affecting some drilling operations. The rate of increase for the remainder of the spring and summer will be partly weather dependent and reliant on an improvement in crude oil and natural gas prices and the degree of caution exercised by some producers over capital spending.