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Drilling numbers show slow-moving economic recovery

Drilling numbers show slow-moving economic recovery

Posted on: 8/8/2018 | Author: ATB Financial's Economics + Research Team

​​Even though some economic indicators like retail sales in Alberta are hitting record highs, the latest drilling data from the Alberta Energy Regulator (AER) show that Alberta’s economic recovery is slow-moving.

As of May, the total number of developmental wells drilled in our province was down almost five per cent with the amount of drilled metres up by 0.4 per cent. Exploratory wells and exploratory metres drilled posted higher rates of growth (20 per cent and three per cent respectively) compared to the same time last year.

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.

Compared to 2017, the growth in the number of wells and metres drilled is much less. In 2017, developmental and exploratory wells (and metres drilled) were double 2016’s totals. Over the first five months of the year, the total number of developmental and exploratory wells, as well as the number of metres drilled are pretty close to last year’s annual totals. This means that overall oil and gas investment this year will be much softer and will moderate Alberta’s pace of growth this year.

Oil and gas drilling, graph

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