Page 12 - NorthAmOil Week 07 2023

NorthAmOil PERFORMANCE NorthAmOil

Precision anticipates increases

in WCSB drilling

WESTERN DRILLING among producers in the West- of the total market share for active rigs in the
CANADA ern Canadian Sedimentary Basin (WCSB) is Clearwater. The company’s Super Single rigs are
expected to rise in the coming years as prices best suited for multiple-lateral pad drilling, with
remain high and so does demand, senior indus- the focus on higher deliverability, he added.
try officials have said. New infrastructure such The Trans Mountain expansion is expected to
as the Trans Mountain expansion coming online be mechanically complete at the end of the third
are also expected to boost activity. quarter of 2023 with commercial service begin-
The heavy oil industry in Alberta and planned ning late in the fourth quarter. The expansion
LNG developments in neighbouring British will increase capacity of the system – which runs
Columbia will account for the bulk of the antic- from Edmonton, Alberta to Burnaby, BC – from
ipated drilling activities in 2023, Calgary-based 300,000 barrels per day (bpd) to 890,000 bpd. It
Precision Drilling’s CEO, Kevin Neveu, told ana- will mostly be used to carry heavy oil.
lysts on an earnings call. “Producers are expected to ramp up drilling Neveu said
There are 78 active drilling rigs in Canada and production ahead of [the Trans Mountain
currently, compared with 64 rigs at the same expansion] coming online,” Alberta Energy that Precision
time last year, Neveu said, adding that 63% of Minister Pete Guthrie told journalists in Edmon-
the total drilling was for crude while the remain- ton in mid-January. currently has
der was targeting natural gas liquids (NGLs) and Conventional oil production in Alberta is
natural gas. forecast to rise from 445,000 bpd in the 2022 45% of the total
Neveu added that the Clearwater heavy oil fiscal year to 483,000 bpd in the 2023 fiscal year, market share for
play in northeastern and central Alberta, which then reaching 494,000 bpd in the 2024 fiscal year,
is being developed as an additional source of Guthrie said. He added that the province’s total active rigs in the
long-term conventional heavy crude in Western natural gas production was set to increase from
Canada, was particularly in focus 4.027bn cubic feet (114mn cubic metres) per day Clearwater.
“The Clearwater formation is a high-perme- in the 2022 fiscal year to 4.219 bcf (119 mcm) per
ability conventional heavy oil play that doesn’t day in the current year, then rising to 4.33 bcf
require speed and doesn’t require hydraulic (123 mcm) per day in the 2024 fiscal year.
stimulation. These are relatively inexpensive NGL production and LNG-related activity
and low cost curve oil wells, typically costing will also continue to drive the demand for Super
CAD1.5-1.7mn [$1.1-1.3mn] per well,” he said. Triple rigs in Canada, Neveu said.
“The operators are reporting that these wells In particular, the first phase of the 14mn
are half-cycle breakeven at $20 per barrel of oil tonne per year (tpy) Shell-led LNG Canada
equivalent, which on that basis, these are lowest project is due to start up in late 2025 on the BC
cost oil wells in North America.” coast, spurring new demand for feedstock nat-
Neveu said that Precision currently has 45% ural gas.™

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