All upstream indicators were up for Canada's oil industry in 1996, the result of higher oil and gas prices.
Canadian Association of Oilwell Drilling Contractors (Caodc) reported a 70% rig utilization rate in 1996, up from 62% in 1995.
Nickle's Daily Oil Bulletin reported a record 12,695 oil and gas wells drilled in Canada in 1996, up from 11,870 in 1994 and 11,082 in 1995. Early industry forecasts call for drilling activity in 1997 comparable to 1996 levels. Rig fleet utilization averaged 92% in December, up 17% from the same time in 1995 and the highest monthly total in 5 years.
Alberta, the main drilling province, averaged 241 rigs under contract in 1996 vs. 218 in 1995 and 254 in 1994. Saskatchewan reported an average 51 active rigs in 1996 vs. 39 in 1995 and 42 in 1994. British Columbia had an average 27 rigs active in 1996, flat with 1995 and shy of the 1994 record of 35. Northern Canada action rose in 1996 to one rig from zero in 1995.
Strong upstream activity is expected to continue in 1997 as an 18-year record for exploration rights in Alberta was set at a Jan. 8 land sale.
Companies spent $85 million (Canadian) for 730 parcels. The previous high for a single sale of drilling rights was $75 million in August 1979.
Alberta officials don't expect 1996-97 revenues to break a 1979-80 sales record of $1.05 billion, but they forecast continued strong demand for exploration rights. Spending to date totals about $668 million for the 1996-97 fiscal year that ends Mar. 31.
The value of Canadian petroleum industry mergers in 1996 totalled $10.3 billion (Canadian) in 1996, reported Toronto merchant banker Crosbie & Co. Inc.
The company survey said the petroleum sector merger total was down sharply from the 1995 total of $21.6 billion, but that total included one $12.2 billion sale of chemical interests. Excluding that deal, industry mergers and acquisitions were up 9.6% in 1996 from 1995.
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