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Drilling activity to provide lift to economic growth

Drilling activity to provide lift to economic growth

Posted on: 10/27/2017 | Author: ATB Financial's Economics + Research Team

Many indicators are beginning to show momentum in Alberta’s economic recovery. The latest drilling data from the Alberta Energy Regulator (AER) shows that Alberta’s energy sector will be central to of the province’s return to growth.

As of August, the total number of developmental wells drilled in the province was up 129 per cent with the amount of drilled metres up by the same amount. Exploratory wells and exploratory metres drilled actually posted higher rates of growth (144 per cent). Over the first eight months of 2017, the total number of developmental and exploratory wells, as well as the number of metres drilled, are higher than last year’s annual totals.

The AER’s drilling numbers look at wells for natural gas, coalbed methane, crude oil and crude bitumen. A development well takes place in an area with a proven resource and is drilled to a depth that is likely to be productive. In contrast, an exploratory well is drilled to find oil or gas in an unproven area. Both these numbers are up significantly compared to the same time last year and show that oil producers in the province are finding their feet after two tough years of recession.

Despite oil prices hovering in the low $US 50 per barrel (West Texas Intermediate) range for the majority of 2017, Alberta oil production has ramped up this year. The sharp increase in drilling and in the production of energy this year will provide a lift to economic growth in our province.

Oil and gas drilling, graph

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