Oil and Gas Drilling Near Record Levels
Second-best year on record
We know it was a record year for the sale of the rights to drill for oil and gas, but how about those actually drilling?
It turns out 2008 was the second-best year ever for Saskatchewan in terms of actual drilling with 4,045 oil and gas wells created. Most of that attention is focused on the Bakken oil play and the Weyburn-Estevan area.
Part of the reason that sector has exploded in recent years is the advent of horizontal drilling. Once an experimental technique it's become common-place in our province, accounting for nearly half of total oil production.
Comments
oil wells
Yes and over 10000 in Alberta inspite of royalty reviews and so called Saskaboom......
No
Horizontal drilling has been common practice since the late 80's - early 90's. It is the combination of improved drilling practices along with a new stimulation technique know as staged fracturing that has made the Bakken viable in the Western Canadian Sedimentary Basin.
AGREED
Its the Bakken play that has fueled the frenzy , but look for a slowdown. I remember when Oil hitting 25-30$ a barrel was great and the floodgates would open , but with a volatile market some of the smaller companies are already ending their drilling plans until prices rise. These drilling numbers should drop of , but within 8-15 months begin to rebound.
good post
That was very good post!! The bakken play people in the business have often referred as "the golden triangle". The area between Weyburn, Estevan and Stoughton.
This oil comes out of ground like water and it's not sour. The netbacks are way higher than say heavy oil in the west or oilsands oil (because a lot less refining required).
not true
most small companys are still going ahead with there drilling plans. the big guys are the ones cutting. they have very high lift costs. very hard to compete with a small company that has 12-24 people in head office verses 250 - 500. the small guys always see a advantage. example the drilling rigs are slow, frac crews etc. the small guys are saving as much as 45% on start to finish per well. the small guys have the brains to see that demand has only dropped 10% , so it will not be long and the price will be stong again. never count out the small producer.
Not true?
All i can tell ya is every small company that we work for has stopped drilling , while every large company we work for is going full steam ahead. I hope they all continue sooner rather than later , but thats just what we are finding so far for 2009......
Intelligence
Another reason why some of these larger companies are holding back on drilling is because they can. They already have thousands of wells on production and have great cashflow. The big guys will wait till prices are high and then capitalize. The small guys need the cashflow now, or else they go under, they cannot afford to sit around and wait.
One reason why timing with prices is important, especially in the Bakken is that stable production is only a fraction of initial production. For example, you will typically see a good horizontal Bakken well come online around 1000-1200 bbl/day. However, after only a few short months, this production decreases to a stable 100-200 bbl/day. Therefore, these first few months are crucial in rapidly paying back the capital investment on these expensive Bakken wells (I believe it costs around 3-4 million per well).