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Thread: 50% of the Canadian Rig fleet active! January 2017 - Fuck Yeah

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    Default 50% of the Canadian Rig fleet active! January 2017 - Fuck Yeah

    JWN has published their weekly rig count, and as of Friday, they had 325 active and 325 down. Note that they count slightly differently than the CAODC, so their number is always a bit higher. Once CAODC publishes on Monday I will update. Last week CAODC was 252/654 for 39%. I think they'll be 290-ish this week.

    The fleet has scrapped a huge number of rigs. I can recall when the fleet was over 800, so 200+ rigs have been cut up. That's probably a good thing. I spent a year working with some of the worst rigs PD had to offer back in the boom times, and they truly aren't competitive.

    Wages haven't risen anywhere as far as I know, but certain positions are getting quite high demand, and if you have your class 1 and a clean abstract, you should be able to go to work right away many places.

    Hiring has picked up in Calgary head offices too, although interestingly, it appears Production is where the bulk of the postings have been. Very few in the D&C or Geoscience worlds. I think I've seen more engineering jobs posted in the last 6 weeks than in the previous 12 months!

    Not quite double meat subs for everyone yet, but I truly feel like we are making good progress here. Remains to be seen how the next two months of OPEC data, Trump presidency, European uncertainty and other geopolitical factors translate into commodity prices and business outlook.

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    Is that the certain class of rig? Includes service rigs?
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    Cement crews are desperate for class 1 hands. Experienced or not. Sanjel had a 24 delay yesterday for lack of crews in central AB.

    Wages are still sh*t, don't kid yourself thinking the shortage will pay you more.
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    Originally posted by Maxt
    Is that the certain class of rig? Includes service rigs?
    These stats are for drilling rigs only, but covers all classes of those, from shallow singles, super single, doubles, heavy doubles, triples walking pad rigs etc.

    CAODC does publish service rig counts, but these days with a huge volume of completions being done rigless, it's not as good of an activity indicator as it used to be. Drilling is still a pretty decent proxy.

    http://www.caodc.ca/rig-counts-service-rig-sr-month

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    Default Re: 50% of the Canadian Rig fleet active! January 2017 - Fuck Yeah

    Originally posted by ExtraSlow
    Not quite double meat subs for everyone yet, but I truly feel like we are making good progress here. Remains to be seen how the next two months of OPEC data, Trump presidency, European uncertainty and other geopolitical factors translate into commodity prices and business outlook.
    If we're in the same shape after breakup as we are now, wow am I going to waste a lot of money on stupid shit after not being able to for two years.
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    I get asked all the time if there is light at the end of the tunnel. I wouldn't go popping the champagne corks just yet. Here is a graph showing rig activity for the last 5 years. At the peak in January last year we were at 241 rigs working, but previous to that there were 438 and before that over 600 rigs working. So do I get excited about being just over 300? Not really. I don't expect it to be worse than last year. But it is going to be another difficult year.
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    If you look at the number of wells drilled we peaked in the mid 2000's at around 24,000. Last year they drilled approximately 3300. The year before that was just over 5000. This year would expect a number closer to the 5000. An improvement but not something to go out and start blowing your savings over. Just the other day another client of mine was laid off from his engineering position in oil and gas. The cuts are not over yet.

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    Last edited by RX-7_TWINTURBO; 01-15-2017 at 08:48 PM.

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    Most companies rush to spend budget before breakup which is intensified now that most companies have been inactive for over a year. I wouldn't get my hopes up for much work going into Q3/Q4 unless we see oil run. My E&P is doing 95% of its work in Q1 and will be shut down for the rest of 2017 unless more money flows our way. Added to the decreased activity is that you just don't need as many people when most majors are drilling under 10 "super" pads in the Duvernay or Montney ($600mm-$800mm capital) instead of 100's of shallower formations (Card, Vik, Mannville) that companies chased heavily in the early 2010's.

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    Originally posted by soloracer
    I get asked all the time if there is light at the end of the tunnel. I wouldn't go popping the champagne corks just yet. Here is a graph showing rig activity for the last 5 years. At the peak in January last year we were at 241 rigs working, but previous to that there were 438 and before that over 600 rigs working. So do I get excited about being just over 300? Not really. I don't expect it to be worse than last year. But it is going to be another difficult year.
    Agreed, also - lets not forget that the day rates/margins are generally lower than they have been in the past.

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    CAODC published a little late today, but they are showing 306/653 active. That's higher than I expected, an increase of 54 rigs this week alone.

    I do agree with the above comments that we won't see a return to the high well counts of decades past, and that we aren't "out o the woods yet" in terms of profitability for the entire sector.

    Still, I'm grasping at any positive signs I can, and rig counts over 300 counts as very positive in my books. So many investment decisions are based on market outlook and sentiment that it's not hard to argue that attitude matters more than hard economics some days.
    Last edited by ExtraSlow; 01-16-2017 at 11:05 PM.

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    JWN count on friday was 345 out of 651 active. CAODC releases monday afternoon.

    Had my first confirmation of an operator who has solid summer drilling plans, PennWest is 3 rigs today, and is planning six for Summer work. Suspect mayn other operators are taking a more wait and see approach to H2 planning.

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    Originally posted by ExtraSlow
    JWN count on friday was 345 out of 651 active. CAODC releases monday afternoon.

    Had my first confirmation of an operator who has solid summer drilling plans, PennWest is 3 rigs today, and is planning six for Summer work. Suspect mayn other operators are taking a more wait and see approach to H2 planning.
    I think we are talking to very different operators if you've only heard of one who has solid drilling pans. Lots of my customers have fairly aggressive drilling plans in place. Even some of the smaller players who usually don't start drilling until after September long weekend are going to be firing up as soon as road bans are off in the spring with 3 rigs (typically they go after sept long with 2 rigs).

    I believe we will see lots of completions that weren't able to be done in Q1 getting completed in early Q3 with a little lull as the drilling rigs punch new holes. Lots of the bigger players in the Montney are even planning on completing their inventory of wells right through Q2.

    From speaking with my customers things are definitely going to be steady on the drilling and completions side which trickles down to production. The big unknown right now is the oil sands which I don't have any part in so I can't speak on that behalf
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    Maybe it's a question of perception. I've heard people who have budgets and plans for summer work, but the individuals I have been talking to think there is a reasonable chance those get deferred or cancelled.

    I only have a window in a few pockets of the industry, I sure hope your perception of the situation is more widely accurate than mine.

    Anyway, CAODC rig count for Jan 23 is 317 active.

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    I don't know what's going on, the CAODC claims it's rig counts are published "monday afternoon", but this weeks hasn't been updated yet, and by my math, it's a long time past monday afternoon.

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    A bit off topic, but CREB is reporting massive increases in sales for January over last year. Over a 40% increase in pending sales.

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    Getting tough to get timely cement.

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    Originally posted by Supa Dexta
    Getting tough to get timely cement.
    And casing
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    Frac has been busy as hell, but our wages are still down, and benefits aren't there. Doesn't seem worth it for the 15 day hitch.

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    Originally posted by CompletelyNumb


    And casing
    and logging
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