Drill Bits & Bytes Part 2: The Decline of Gas Drilling in Western Canada

March 13, 2013 by

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy.

To say that gas drilling has declined in the last six years wouldn’t come as a surprise to anyone in the industry, but how much has it declined? Today, we are going to quantify the changes in gas drilling activity, what companies are drilling and what plays they are drilling using VISAGE and data from the IHS Information Hub.

Since 2006 vertical gas well drilling has dropped by 98.5%. In 2006 there were 27 times more vertical wells drilled than horizontal. In 2012 there were 3.4 times more horizontal wells drilled than vertical. This profound shift towards horizontal wells has meant that the average measured depth of wells has increased 3 times.

1---Gas-Drilling-Activity

How long and how deep are horizontal wells?

The average true vertical depth of horizontal wells has steadily increased from 1831m to 2486m over the last six years (an increase of 655m).

The average length of horizontal wells has also steadily increased from 1214m to 1708m over the last six years (an increase of 494m).

An interesting way to look at the evolution of horizontal well lengths is in a cumulative probability distribution, or percentile chart. This chart shows a distribution of the horizontal lengths drilled in each year since 2006. It effectively communicates the variability of horizontal lengths in each year (by the shape of the distribution) and how the data trends over time (by the relative position of each distribution). I’ve highlighted the P50 values for each year so you can see how the biggest step changes occurred in 2008 and 2009.

2---Gas-Well-HZ-Length-Dist

Who’s drilling gas wells?

When I started examining this, I quickly changed the question to “Who’s not drilling gas wells?” So I decided to take the top 13 gas drilling companies from 2010, and see how their gas drilling activities have evolved in the last 3 years. They are sorted from left to right in terms of total number of wells drilled in the last 3 years. Only one company has had a consistent increase in drilling over that time: Peyto Exploration & Development.

3---Top-13-Companies

What gas plays are being drilled?

I took the same approach when looking at what plays are being drilled. I took the top 13 stratigraphic units from 2010 (in terms of gas wells drilled) and plotted how they have evolved over the last three years. It’s no surprise that the Montney was the dominant play in 2012, even though drilling activity in the Montney has dropped by 60% since 2010.

4---Top-13-Strat

So how have changes in gas drilling activity affected production?

Stay tuned. I’ll summarize this in my next blog … coming soon.

You may also be interested in the rest of the series:

Drill Bits & Bytes Part 1: Curious about drilling activity in Western Canada

Drill Bits & Bytes Part 3: A Shift in Western Canada’s Gas Production

Drill Bits & Bytes Part 4: Oil Drilling Activity in Western Canada

Drill Bits & Bytes Part 5: Western Canada Oil Keeps Rising