Vital signs: drilling rush accelerates, led by stellar B.C. natural gas discoveries

A recent survey of drilling activity in the Western Canadian Sedimentary Basin provide clear evidence of intensified efforts to match the aggressive forecast of 17,500 well completions in 2001, forecast by the Petroleum Services Association of Canada, or the 18,500 new wells forecast by the Canadian Association of Oilwell Drilling Contractors, and satisfy the expected strong natural gas demand. The rush for drilling properties boosted first-quarter land sale bonus payments by 78 per cent to more than $500 million, or about $356 per hectare from $282 million or $256 per hectare in the first three months of 2000. Land acquisition is most robust in northeastern British Columbia, where a series of 50-million-cubic feet-per-day discoveries in the Ladyfern region has ignited the hottest exploration play of this year, resulting in a 400 per cent increase in first quarter bonus payments to $212 million, or $613 per hectare. Overall Western Canada rig count peaked at 614 active units in late February, declining since to 264 rigs in April, due to the onset of spring breakup. Success rate in the first quarter of 2001 for exploratory drilling peaked at 72 per cent, up from 53 per cent a year ago. Industry-wide success rate jumped to 83 per cent from 75 per cent in 2000. Average depth in BC in the first quarter of 2001 reached 1,700 metres, the highest in Western Canada, compared to about 1,300 metres a year ago. Industry-wide, the average depth slipped from 1,143 metres to 1,134 metres, reflecting the continuing reliance on shallow gas drilling in an effort to attach known reserves as quickly as possible. Offshore drilling on East Coast provides a different picture: drilling depth averages climbed to 10,339 metres from 7,131 metres in 2000. Discovery of the Deep Panuke field by PanCanadian Petroleum is considered partly responsible for the sudden increase in well depth. tabs., 2 photos