Oil drilling activity in western Canada in 1989 slid to the lowest level of the 1980s, reports Canadian Oil Patch Analyst Inc. (COPA), Calgary.
COPA figures show the industry completed only 1,803 oil wells in the region last year, compared with 4,251 in 1988. Natural gas completions were up slightly in 1989 at 2,349 wells from 2,337 wells in 1988.
"The consensus is that there are no more 'elephant' size oil fields to be found in western Canada, and thus gas drilling has supplanted oil for the first time in 7 years," said COPA, a member of the Ziff Energy Group.
The company said a good supply of producing leases offered for sale hampered exploratory drilling. It pegged western Canada's 1988 oil replacement cost at an average $9/bbl and pointed out that oil reserves can be bought for "significantly less."
PanCanadian Petroleum Ltd. was the leading operator for 1989 oil completions with 166 wells. In 1988, Esso Resources Ltd. was the leader with 365 wells, many of them shallow holes drilled for heavy oil.
Bow Valley Industries Ltd. claimed the No. 1 spot for gas completions in 1989 with 184 wells.
Alberta, traditionally Canada's top producer of oil and gas, accounted for 1,292 wells or 55% of gas wells drilled in 1989, a big percentage drop from its 95% share in 1980.
Saskatchewan, with 957 wells or 40% of the 1989 total, is growing in importance.
"The movement into Saskatchewan is clearly demonstrated," COPA said.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.