Poor rig numbers for winter drilling season this year

Usually more rigs work in January and February than July and August. Not this year

With just a few days before the anticipated imposition of spring road bans, there were 35 rigs working in Saskatchewan as of the morning of March 13. That’s down from 47 on March 15, 2018, and 50 on March 15, 2017.

Those numbers are according to sister publication Rig Locator (riglocator.ca). Crescent Point Energy Corp. accounted for 12 of those rigs, and Husky Energy had four, as did Vermillion Energy Inc., Teine Energy Ltd. and Serafina Energy Ltd. each had three rigs going. Large players notable for their absence were Whitecap Resources Inc. and Baytex Energy Ltd.

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The winter drilling season is historically the busiest, by far, with rig counts usually 50 per cent or more than what is seen in the summer. But this winter proved to be the exception. The average rig count from mid-January to mid-March averaged around 50, slightly below what it was last summer from mid-July until mid-November.

A precursor to the low January to March numbers was the low rig counts throughout much of December. The traditional Christmas shut down stared on Dec. 6, when there were 41 rigs working, and plummeted in a straight line down to 30 on Dec. 13 and 20 on Dec. 20. In previous years, more rigs would typically work at least half-way into December before shutting down.

Superimposing the graph from 2017-19 over 2010-2012 shows just how badly the Saskatchewan oil industry has fallen over the last decade. This graphic doesn’t even include the worst years, like 2016, when the rig count was around 25 during the normally busy summer months. If this is the “new normal,” it is a shadow of its previous self.

If the numbers seem low throughout the winter of 2019, that’s because they are, compared to what Saskatchewan had become accustomed to up until the summer of 2014, when the current downturn hit. According to Rig Locator graphs from 2010, 2011 and 2012, Saskatchewan’s winter drilling season averaged around 77 rigs in 2010, 90 rigs in 2011, and 105 in 2012.

The Great Recession stemming from the 2008-2009 global fiscal crisis meant the oilpatch had a tough year in 2009, and 2010 was a rebuilding year. But that ‘rebuilding year’ was dramatically better than what we’ve seen in recent years. The following year, 2011, showed a peculiarity in that its summer season was even more active than the winter season, with rig activity running often in the 110 rig-range. On Aug. 22 of that year, there was a spike of 122 active rigs on that one day. (This one-day spike did not show up on the weekly statistics in this graph.)

Now, there aren’t even 122 rigs in all of Saskatchewan. The 35 active rigs accounted for a utilization rate of 31 per cent of the 113 rigs listed in Saskatchewan.

© Virden Empire-Advance

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