Comment with posting this article on ASRG FB page:
Grant Collies
As a landowner this is welcome news, maybe I can save at least one quarter on land being uncontaminated by industry.
Canadian drilling activity at more than 25-year low: Peters & Co. by Deborah Jaremko, Oct. 9, 2019, JWN
Drilling activity in Western Canada is currently depressed at historic levels, according to a new report from Peters & Co. Limited.
Continued cautiousness by operators and unfavourable weather in several regions, notably Saskatchewan, contributed to an average of 134 active rigs in the field in the third quarter, the lowest level in over 25 years, analysts said.
“Activity in all major plays declined, with the most pronounced weakness in the Deep Basin and Montney. Large Cap operators scaled back activity most aggressively, while the Intermediate group was the least impacted,” Peters & Co. said.
“In the early days of October, activity is tracking 40 percent below the same period in 2018, with activity levels largely paralleling 30-year lows. We expect fiscal discipline and budget exhaustion will be pronounced during Q4/2019, with activity forecasted to decline 30 to 35 percent year-over-year. In absolute terms, we expect the rig count during the fourth quarter to be at the lowest level since 1991.”
Analysts forecast that in 2020, the producer capital-spending-to-cashflow ratio will be at the lowest level of the past decade. [Greed greed greed!~]
“While this highlights the capacity for operators to increase spending, activity will remain constrained by concerns over oil and gas egress from the WCSB and investors’ desire for companies to prioritize dividends/share buybacks over growth.”
Activity has also declined in the U.S. market, Peters & Co. noted.
“During Q3/2019 the U.S. land rig count declined 8 percent on a sequential basis and 13 percent year-over-year, with weakness accelerating during the last six weeks of the quarter. Active rigs have declined in all plays, with the most pronounced weakness in Oklahoma, the Marcellus and Eagle Ford. The Permian continues to show resiliency, with over 50 percent of U.S. land rigs operating in the play (up from 47 percent at the beginning of Q3/2019),” analysts said.
Peters & Co. forecasts that U.S. land drilling activity will decline by an average of three rigs per week during Q4/2019, translating into a full-year average active rig count of 925 rigs, which is nine percent below the 1,013 average in 2018.
“Fiscal discipline remains the underlying governor of North American operating spending and, absent improved access to external capital and/or higher commodity prices, we expect this will translate into North American capital spending declining 5-10 percent year-over-year in 2020.”
Around 7,000 fewer workers on Alberta oil and gas drilling rigs compared to 2018: ATB Financial by Brennan Doherty, Oct 9, 2019, Star Calgary
Roughly 7,000 fewer workers were on Alberta’s oil and gas drilling rigs in the first nine months of the year compared to 2018, according to estimates from ATB Financial on Wednesday.
The Alberta financial institution said the average number of active drilling rigs in Alberta between January and September was 92. That figure was 140 during the same nine-month period in 2018. And in 2014, shortly before a global oil price collapse gutted the industry, Alberta had an average of 252 active rigs.
“With pipelines full, natural gas prices weak, and uncertainty around when new pipe and liquified natural gas (LNG) export capacity will be online, companies and investors are reluctant to engage in more drilling,” read a brief ATB report.
Citing statistics from the Canadian Association of Oilwell Drilling Contractors, who represent oil and gas drillers, ATB’s report says each active rig represents around 21 direct jobs, as well as 124 indirect ones.
The findings outline a rough year for Alberta’s oil and gas industry thus far. Industry leaders and politicians alike continue to bemoan a lack of pipeline capacity in Western Canada. The Trans Mountain pipeline expansion project is expected to nearly triple the system’s capacity to the West Coast, but won’t be online until mid-2022.
Estimates from Petroleum Labour Market Information (PetroLMI), a division of Energy Safety Canada which compiles labour market information about the country’s oil and gas industry, found nearly 3,000 workers in Alberta left or lost their jobs between April and May alone.
In April, it predicted a drop of 12,500 jobs in Canada’s industry will be lost by the end of 2019 due to low prices and a decline in oil and gas investment.
Not all of these lost jobs are necessarily due to a lack of pipelines.
The global oil and gas industry is automating and digitizing heavily to cut costs, leading to the loss of some jobs such as heavy haul drivers. …