DRILLING PERFORMANCES OF 1994 TO REPEAT IN 1995 IN U.S. AND CANADA

Jan. 30, 1995
G. Alan Petzet Exploration Editor Majors' Drilling Outlook (19821 bytes) Oil & Gas Journal Well Forecat for 1995 (13167 bytes) A 26 Year Record of U.S. Well Completions (12360 bytes) U.S. Fields With Ultimate Oil Recovery Exceeding 100 Million BBL (67539 bytes) U.S. Fields With Ultimate Oil Recovery Exceeding 100 Million BBL (Continued) (68985 bytes) The years 1995 and 1994 may turn out to be nearly carbon copies in terms of the number of wells to be drilled in the U.S. and Canada.
G. Alan Petzet
Exploration Editor

Majors' Drilling Outlook (19821 bytes)

Oil & Gas Journal Well Forecat for 1995 (13167 bytes)

A 26 Year Record of U.S. Well Completions (12360 bytes)

U.S. Fields With Ultimate Oil Recovery Exceeding 100 Million BBL (67539 bytes)

U.S. Fields With Ultimate Oil Recovery Exceeding 100 Million BBL (Continued) (68985 bytes)

The years 1995 and 1994 may turn out to be nearly carbon copies in terms of the number of wells to be drilled in the U.S. and Canada.

OGJ estimates that operators will drill only 3.6% more wells in the U.S. this year than they did in 1994. The totals for both years are considerably below the expectations held early last year for 1994 U.S. drilling.

Canada, on the other hand, is poised for its third straight near record year in terms of numbers of wells drilled.

Gas drilling in Canada is set to remain strong this year. Gas prices that many U.S. producers consider lukewarm have not daunted their Canadian counterparts, including those in the midst of programs involving hundreds of wells.

U.S. operators had to make do in 1994 with combined wellhead revenues of an estimated $67.6 billion, far short of the more than $80 billion projected early last year because of relaxed oil and gas price performance.

OGJ looks for a 3.6% increase in revenues to about $70 billion this year. It forecasts that producers will reinvest $9.8 billion on U.S. drilling and completion, 8.8% more than OGJ estimates they spent in 1994.

This level of spending is unlikely to boost the U.S. average rig count much from its unstrained 1994 pace. Minor spot and logistical land rig inconveniences are considered probable even without a surge in drilling.

Here are highlights of Oil & Gas Journal's early year drilling forecast for 1995:

  • Operators will drill 21,950 wells, compared with an estimated 21,190 wells drilled in 1994.

  • Operators will drill about 3,995 exploratory wells, compared with an estimated 3,839 last year.

  • The active rotary rig count will average 790, up from 775 in 1994.

  • The surveyed group of major operators will drill 2,970 wells, up from 2,701 wells they said they drilled in 1994.

  • Drilling by all operators in western Canada will total 11,650 wells, compared with 11,473 wells last year.

U.S. HOT SPOTS

Returns from major oil companies to an OGJ survey on drilling plans indicate that the Gulf of Mexico will be a busy area in 1995.

Majors responding to the survey said they plan to be operators of record for 388 wells-including 86 exploratory wells-off Louisiana during the year. The total would be a 50.9% increase from the number of wells the same majors said they drilled in the same area last year.

OGJ expects independents and majors to drill a combined 765 wells off Louisiana this year.

The majors said they drilled nearly 1,000 wells in California heavy oil fields during 1994 and plan to drill 867 there this year.

Other onshore plays generating numerous wells in both years are Cretaceous Austin chalk gas/condensate horizontal drilling east of Giddings field in Grimes County, Tex.; spirited gas plays in East, South, Gulf Coast, and southern West Texas; the Devonian Antrim shale gas play expansion in Michigan; Ordovician gas targets in Ohio; Colorado's Wattenberg field; and other simmering gas plays in the Rocky Mountains.

Overall, the responding majors indicated plans for 2,970 wells in the U.S. this year, 9.9% more than they drilled in 1994. The plans include 238 exploratory wells, up from 171 in 1994.

CANADIAN OUTLOOK

OGJ looks for a 1.5% increase in western Canada drilling this year, with increases in every province.

Operators added large inventories at land sales during 1994. All signs point to 1995's being a repeat of busy 1994, when about 14,000 permits to drill were issued.

The western Canadian rig count, estimated at 325-425 by various sources, has kept up with the high levels of conventional drilling and the increasing share of horizontal wells being drilled in Alberta, Saskatchewan, and British Columbia.

While the high drilling and leasing levels persisted, consulting firms found that western Canada's royalty and tax systems compare poorly with those of the rest of the world. In a study, the companies ranked Alberta, Saskatchewan, and British Columbia among the bottom 20% of 226 fiscal systems in 144 countries. Barrows Co., New York, and Van Muers & Associates Ltd., Calgary, prepared the study.

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