Drilling activity returned to Alberta with an increase in new wells drilled and active rigs in the first quarter of 2017.
Alberta operators drilled 1,199 wells during the first three months of 2017 compared with 519 a year ago, a 131 per cent increase in activity, according to industry figures. This was the largest increase in activity and the highest number of wells drilled overall in Western Canada from January to March.
The number of active rigs was also up during the same time period, averaging 210 rigs drilling over the three months, a 101 per cent increase from 2016 levels. Each active drilling rig can support 135 direct and indirect jobs. One rig will often drill multiple wells.
“I’m pleased to see our new royalty system is helping play a part in getting Albertans back to work in our energy sector. I’ve personally seen this boost in activity near my home in northern Alberta and the positive spinoff it’s having on the rural hotels, restaurants and hardware stores in our province.”
In an updated 2017 forecast, the Petroleum Services Association of Canada estimates 3,320 wells will be drilled in Alberta this year which is 650 more than the next highest province.
The increased activity coincides with improved resource prices compared to the same period in 2016 and comes as the Modernized Royalty Framework takes effect. It was put in place Jan. 1 and focuses on encouraging innovation and supporting companies that can lower their operating costs below the industry average.