US drilling increases, Canadian outlook good

By OGJ editors

HOUSTON, Feb. 14 -- US drilling activity jumped by 21 rotary rigs with 905 units working this week, up from 815 during the same period a year ago, officials at Baker Hughes Inc. reported Friday.

All of the gain was on land, up 25 rigs to 779 for the week. Offshore drilling declined by 3 units to 105 working in the Gulf of Mexico and 109 in US coastal waters as a whole. Activity in inland waters declined by 1 unit with 17 rotary rigs working.

Meanwhile, ODS-Petrodata, Houston, said Friday that demand for mobile offshore rigs in the Gulf of Mexico continued to decline, with 3 more rigs coming off contracts this week with no new jobs waiting. The utilization rate among mobile offshore rigs in the gulf now stands at 59.8% with 110 rigs still contracted out of 184 available in those waters. That follows the loss of 4 units the previous week, which put the rig utilization rate in those waters at the lowest level since May 1999 (OGJ Online, Feb. 7, 2003).

Canadian outlook
Canadian drilling activity inched up by 1 unit with 549 rotary rigs working this week, up from 428 the previous year. However, analysts with Jefferies & Co. Inc., Houston, said Friday, "Despite (recent) strong winter drilling activity, several (Canadian) operators are looking to contract a higher number of rigs during the traditionally weak spring breakup period and the summer months due to a backlog of potential projects that cold not be drilled during the winter."

Jefferies analysts increased their Canadian rig count forecast for 2003 to an average 340 active units, up from 319 previously. "We believe that firm demand during the traditionally weather-constrained summer months could help Canadian contractors . . . pass through price increases for the fall and winter drilling season in 2004," they reported.

"With firm natural gas prices and a significant amount of pent-up demand, winter drilling activity in Canada is up 25% from year-ago levels, with the Canadian onshore rig fleet approaching full utilization and several contractors looking for additional crews to satisfy demand," analysts said.

Jefferies analysts currently are forecasting 17,300 wells to be drilled in Canada during 2003, up 16% from the 14,920 drilled in 2002 and in line with the 17,359 wells drilled in 2001.

US drilling
Among the US rotary rigs currently working, those drilling for natural gas increased by 18 to 752, while those drilling for oil were up 3 to 149. Four rigs were unclassified this week. Directional and horizontal drilling operations were down 2 rigs each to 235 and 54, respectively.

Texas led this week's increase, up 20 rigs with 408 units drilling. Oklahoma's rig count gained 3 to 111. Louisiana and Wyoming gained 1 rig each to 154 and 41, respectively. California and Alaska were unchanged at 16 and 10, respectively. New Mexico's rig count was down 3 to 53.

Meanwhile, ODS-Petrodata said the number of mobile offshore rigs under contract in European waters increased by 2 to 83 out of 101 available, with utilization up 2 points to 82.2%. Worldwide, there was a net loss of 3 contracted mobile offshore rigs, with 517 still contracted out of the 656 total fleet available for 79.8% utilization.

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