Canadian Drilling – Summer Heat Lifts Rig Counts

For the week of July 11, Baker Hughes reported that the Western Canadian gas-directed rig count rose one to 50 (blue line and text in left hand chart below), 13 less than one year ago and the lowest for this time of year since 2021. The oil-directed rig count increased by ten to 111 (red line and text in right hand chart), 12 less than a year ago and the lowest for this time of year since 2021. Persistently low gas prices in Western Canada appear to be holding back the gas rig count, while the increase in the oil rig count may be a function of recent warmer and drier weather in parts of Western Canada allowing for the greater movement of rigs and affiliated heavy equipment. Further increases in rig counts will be reliant on a sustained improvement in crude oil and natural gas prices and the degree of caution exercised by some producers over capital spending.