Canadian Association of Oilwell Drilling Contractors (CAODC)

Canadian Association of Oilwell Drilling Contractors (CAODC)

May 27, 2013 11:30 ET

CAODC Revises 2013 Forecast - May 27, 2013

CALGARY, ALBERTA--(Marketwired - May 27, 2013) - The Canadian Association of Oilwell Drilling Contractors (CAODC) has released its revised 2013 Forecast. The initial 2013 Forecast was released in November 2012. The revised 2013 Forecast includes actual first quarter data and minor adjustments to forecast totals.

These adjustments include a 2.3% increase in the projected well count for 2013 - from 10,409 wells to 10,649 wells.

First Quarter Actuals

From January to March, industry ran an average of 496 rigs, putting rig utilization for western Canada at 61%. These numbers are very close to those anticipated in the initial 2013 Forecast - which had predicted 498 active rigs running for an overall utilization of 60%.

First quarter activity was distributed across western Canada as follows: in Alberta, utilization averaged 60% (365 rigs running out of a fleet of 607); in Saskatchewan, 56% (70 rigs out of 125 available); in British Columbia, 81% (47 out of 58 available rigs); and in Manitoba, 55% (13 out of 24 rigs available).

Forecast Updates

CAODC projects that quarterly utilization will be consistent with what was identified last fall, with the exception of an uptick in the third quarter. Second quarter utilization will remain at 20%, with an average of 164 rigs working. The third quarter will be up slightly to 40% utilization (from 35%), or 330 rigs working. For the fourth quarter, CAODC expects utilization of 45%, or 374 rigs working.

The most substantive revision to the Forecast focused on fleet size. Last November, CAODC noted contractors planned to add new rigs in 2013 and had anticipated the fleet size for the year would average out to 830 rigs. It is still the case that the fleet is in a period of growth, but this new equipment will come available later in the year. As a result, CAODC has adjusted its 2013 Forecast to reflect an annual fleet average of 823 rigs.

Industry continues to drill complex horizontal wells and averages 11.4 days per well. In the first quarter, industry accumulated 43,418 operating days, slightly less than the forecasted 44,367. Nevertheless, CAODC anticipates that total operating days in 2013 will be - like the well count - higher than first thought. CAODC had initially predicted 118,401 operating days but now anticipates an accumulation of 121,126 operating days.

This upward revision is based on the current expectation that third quarter utilization will outperform the original forecast.

A key challenge for the industry continues to be market access issues. Uncertainty pertaining to future transportation capacity continues to weigh on the sector. Short-term solutions (upgrades to existing pipeline capacity and increases in rail transportation volumes) have led to increased optimism in the sector. CAODC members are hopeful that progress can be made to ensure the free-flow of product into markets.

Full details regarding the revised 2013 Forecast are available at www.caodc.ca/forecast/forecast.html.

The Canadian Association of Oilwell Drilling Contractors is a trade association that represents the contract drilling and service rig industry across Canada. CAODC members include 48 land-based drilling contractors, 2 offshore drilling contractors, 79 service rig contractors and 190 associate members.

Contact Information

  • Canadian Association of Oilwell Drilling Contractors (CAODC)
    Cindy Soderstrom
    Communications Manager
    (403) 264-4311
    csoderstrom@caodc.ca

    Canadian Association of Oilwell Drilling Contractors (CAODC)
    2050, 717 - 7th Avenue SW
    Calgary, AB, T2P 0Z3