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

April 10, 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.

Today’s blog focuses on gas production and how shifts in the industry have changed production trends in recent years. Using VISAGE and data from the IHS Information Hub, I have assembled analyses on:

  • gas production changes by province
  • changes in average production per well over the last 50 years
  • how the shift towards horizontal drilling & completion technology has impacted production

Gas production in the WCSB started declining in 2006, with the two most dramatic drops occurring in 2009 (6.6%) and 2012 (6.3%). These drops seem small compared to the 98.5% drop in drilling activity since 2006.  In 2011, production drops in Alberta and Saskatchewan were offset by an increase in British Columbia production of more than 16.6%. BC’s production in 2012 was almost exactly the same as 2011, coming in at 3,872 mmcf/day. BC now accounts for 28% of all WCSB gas production. The bulk of the production decline in the WCSB is attributable to AB, who’s production has dropped 34% since its peak in 2000, more than a third of that decrease occurring in the last three years.

Blog-3-1-WCSB-Gas-Province

More from less and less from more

The statement “More from less and less from more” characterizes how well performance has evolved since the early seventies. In 1972 the average well produced more than 16 times what today’s wells produce (this excludes production from gas storage wells and CBM).

Blog-3-2-WCSB-Gas-Well-Summ

Horizontal Shift

With a shift towards horizontal drilling comes a shift in production. November 2012 was the first time in history when horizontal well production rates collectively exceeded those of vertical wells. In December 2012, horizontal wells accounted for 44% of all gas production.

Blog-3-3-WCSB-profile-type

Technology Shift

If you were to examine any active play today and compare the production profiles of a horizontal well to a vertical well (check out this example from my previous blog post) you can see why drilling and completion technologies have become a clear focus in the industry. I was curious to see how this has impacted the average gas production per well over the last few years and what a type curve analysis might look like on the entire WCSB. The average initial rate in month two of 2012 wells (vertical, deviated and horizontal) is almost four times those of 2009.

The shift to horizontal wells is having an impact, which means we have the ability to increase gas production more quickly, with fewer wells. However, with these steeper declines our reliance on drilling and completion technology becomes more pronounced. Watch for a guest blog post in the coming weeks to address this topic in more detail.

Blog-3-4-WCSB-Vintage

Play Shift

To illustrate the impact horizontal drilling and completion technology have had on production, you need look no further than my next chart … production rates by producing zone (stratigraphic unit). In this chart I have identified the peak production rates of the nine top zones (since 1964). The clear message from this (as evidenced by Montney and Cardium Sand, the only zones with consistent growth since 2009) is that we can continue to expect technology to accelerate production in key plays … but questions arise:

  1. How sustainable is this accelerated production growth in these plays?
  2. What other plays could appear in future years? Montney and Cardium growth of this kind wasn’t on the radar a decade ago.
  3. How has the shift in horizontal drilling and completion technology impacted oil production? This will be the focus of my next blog series.

Blog-3-5--Strat-Unit-WCSB-G

This concludes the gas portion of the Drill Bits and Bytes series. The next two blogs will focus on Oil drilling activity and production in Western Canada. As always, please let me know if you have any suggestions for future blogs. We’d love to hear from you.

You may be interested in the rest of the series:

Drill Bits & Bytes Part 1: Curious about Drilling Activity in Western Canada

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

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

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