|By Marketwired .||
|June 25, 2014 02:58 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 06/25/14 -- The Canadian Association of Oilwell Drilling Contractors (CAODC) has updated its 2014 Drilling Activity Forecast.
The spring update is when the Association reflects on first quarter activity - the time of year when industry is busiest - and weighs emerging trends that may impact the rest of the year.
But when the CAODC Forecasting Committee met last month, it was the strength of second quarter activity that swayed the conversation.
"This is the strongest second quarter we've seen in seven years," says CAODC president, Mark Scholz.
Industry's operating days for the second quarter will easily surpass 17,000. Operating days over the last seven years ranged from 8,411 at the low end (2009) to 16,369 on the high end (2011).
"Stronger gas prices have increased cash investment to the industry," says Scholz.
Drilling activity follows a distinct annual cycle. Rig utilization and operating days are highest in the first quarter. Second quarter activity drops due to spring break-up. The third quarter sees strengthening activity. In the fourth quarter, activity trends higher still as cold weather opens more opportunity.
The revised CAODC 2014 Forecast has been updated to show actual first quarter activity statistics and revised projections for the remainder of 2014.
In the first quarter, rig utilization in western Canada averaged out to 64%, or 521 rigs active out of a fleet of 809. Operating days for the quarter totalled 44,721.
The revised CAODC 2014 Forecast projects second quarter activity to be 23% utilization with a total of 17,342 operating days. This is a distinct increase over what the committee projected last November (19% utilization and 14,230 operating days).
Third quarter activity is projected to be 45%; operating days are projected to total 33,818.
Fourth quarter activity is projected to be 48%; operating days are projected to total 36,072.
This stronger activity, as well as indications that shallow gas wells will figure slightly more prominently in 2014 than in 2013, compelled the Association to also increase its 2014 well count projections.
Last November, CAODC projected a well count of 10,604. The Association now expects the well count for 2014 to be 11,494.
A well count of 11,494 is a 6% increase over 2013's well count.
Scholz adds, "Oil and gas producers are benefitting from investor optimism. And that means more wells will be drilled. It's a good news story. It means more rig activity and more jobs across Canada."
The Canadian Association of Oilwell Drilling Contractors is a trade association that represents Canada's drilling and service rig industry. The membership in the Association includes 44 drilling contractors, 2 offshore contractors, 83 service rig contractors and 210 Associate Division members.
Canadian Association of Oilwell Drilling Contractors (CAODC)
Ph: (403) 264-4311