Energy firms in Canada boosted the number of rigs drilling for oil and natural gas last week by the most since January 2015 as producers returned en masse from Christmas breaks to take advantage of rising crude prices, Baker Hughes reported on Jan 13.
Drillers added 118 rigs during the week ended Jan. 10, bringing the total count up to 203, the highest since March 2019, data from Baker Hughes Co. showed on Jan. 13.
That was the biggest weekly increase since drillers added 158 rigs during the week of January 9, 2015.
Most of the rigs added last week were in Alberta (69) and Saskatchewan (42).
Drillers in Canada, like their counterparts in the United States, slashed the number of rigs operating in 2019 as energy prices dropped due to a global glut.
In the last few months of 2019, however, U.S. crude futures jumped about 29% as prices rose from a near two-month low of $50.99 per barrel on Oct. 3 to an eight-month high of $65.65 on Jan. 8.
Looking forward, U.S. futures were trading around $57 a barrel for the balance of 2020 and $53 for calendar 2021. That compares with an average of $64.90 in 2018 and $57.04 in 2019.
Drilling in Canada is seasonal.
The Canadian rig count usually increases in January as producers start drilling again after a Christmas break before declining in the spring when the snow melts and it becomes too muddy to operate. The industry calls that snow melt the spring break up.
The rig count increases again in the summer when the ground dries and usually holds onto those gains through December when the count drops during the last week of the year for the Christmas break.
In 2019, the rig count jumped from 70 during the last week of 2018 to a high for the year of 243 in February before falling as low as 61 during the spring break up in May.
The count then climbed to 150 rigs during the summer and 153 by mid-December as rising crude prices encouraged drillers to add rigs before falling to 85 during New Year's week in 2020.
The world's top seven energy firms—BP, Shell, Exxon Mobil, Chevron, Equinor, Total and Eni—raised $60 billion in debt in the quarter, nearly half of the $132 billion in oil and gas sector borrowing over the period.
Years of M&A since the last downturn have produced suboptimal returns, which may lead oil and gas majors to focus on asset-level deals.
Schlumberger CEO Olivier Le Peuch said the restructuring will include cuts in the oilfield service company's product lines and focus its operations on five key oil basins.