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Released February 11, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Following record low investment in 2020, Canada's Oil & Gas Industry is optimistic this year's vaccine rollout will inject it with some much-needed demand growth. Precision Drilling Corporation (NYSE:PDS) (Calgary, Alberta), a service provider in Canada's western provinces, is among the companies betting that improved market conditions and government support will boost the need for drilling automation processes in the region's oil fields. Industrial Info is tracking more than US$1.7 billion in active projects involving Precision Drilling, all of which are slated to kick off through the summer.
Click on the image at right for a graph detailing 2021's drilling programs involving Precision Drilling, by project owner.
The Canadian Association of Petroleum Producers predicts investment in the nation's upstream industry will grow 14% this year to C$27.3 billion (US$21.44 billion). Although this number would be 23% below investment in 2019, it is good news for companies with existing contracts--such as Precision, which entered into 21 term contracts in 2020. Precision expects its capital expenditures in 2021 will total $54 million: $16 million for upgrade and expansion, and $38 million for sustaining, infrastructure and intangibles. Capital spending in 2020 totaled $62 million.
Not surprisingly, the oil-rich province of Alberta accounts for more than half of the investment value for projects featuring Precision's services. Seven Generations Energy Limited (Calgary) has contracted Precision for its estimated US$314 million Cutbank Nest II drilling program near Grande Prairie, and its US$98.1 million Lator Nest III program near Grande Cache. The projects are set to kick off in April and May, respectively, and run through December. Seven Generations is among the Canadian producers that expects to keep production flat in 2021, with stable year-round activity. For more information, see Industrial Info's reports on the Cutbank and Lator programs.
Other projects in Alberta include NuVista Energy Limited's (Calgary) US$90 million Pipestone North program in Grande Prairie, which began last month and is expected to run through June, and Tourmaline Oil Corporation's (Calgary) estimated US$200 million Musreau program near Grande Cache, which is expected to begin in April and run through the end of the year. For more information, see Industrial Info's reports on the Pipestone and Musreau programs.
Tourmaline also is preparing for its estimated US$200 million Gundy Creek drilling program near Dawson Creek, British Columbia, which will kick off in March. Executives at Tourmaline recently pointed to improving natural gas fundamentals for 2021--particularly in markets in the western half of North America, which accounts for 72% of Tourmaline's natural gas sales. "That's where the 2021 gas supply diminishment is anticipated to be the greatest, and hence, the prices the strongest," Tourmaline executives said in a recent quarterly earnings-related press release. For more information, see Industrial Info's project report.
ARC Resources Limited (Calgary) is contracting Precision for two of its projects near Dawson Creek, which sits on the border with Alberta: the estimated US$168 million Dawson program in Rolla and the estimated US$77 million Sunrise program in Farmington. Both projects are set to kick off in April and wrap up in December. For more information, see Industrial Info's reports on the Dawson and Sunrise programs.
Executives from Precision also say the industry is benefiting from the Canadian federal government's $1.7 billion well site abandonment and rehabilitation program, which it believes will support industry activity throughout western Canada. "As the use of service rigs is an integral part of the well-abandonment process, our well-servicing business is positioned to capture these opportunities," the company said in a quarterly earnings-related press release. "Our abandonment service activity increased in the fourth quarter of 2020, compared with the third quarter, and we expect further increases through the end of the well site abandonment and rehabilitation program in 2022."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a graph detailing 2021's drilling programs involving Precision Drilling, by project owner.The Canadian Association of Petroleum Producers predicts investment in the nation's upstream industry will grow 14% this year to C$27.3 billion (US$21.44 billion). Although this number would be 23% below investment in 2019, it is good news for companies with existing contracts--such as Precision, which entered into 21 term contracts in 2020. Precision expects its capital expenditures in 2021 will total $54 million: $16 million for upgrade and expansion, and $38 million for sustaining, infrastructure and intangibles. Capital spending in 2020 totaled $62 million.
Not surprisingly, the oil-rich province of Alberta accounts for more than half of the investment value for projects featuring Precision's services. Seven Generations Energy Limited (Calgary) has contracted Precision for its estimated US$314 million Cutbank Nest II drilling program near Grande Prairie, and its US$98.1 million Lator Nest III program near Grande Cache. The projects are set to kick off in April and May, respectively, and run through December. Seven Generations is among the Canadian producers that expects to keep production flat in 2021, with stable year-round activity. For more information, see Industrial Info's reports on the Cutbank and Lator programs.
Other projects in Alberta include NuVista Energy Limited's (Calgary) US$90 million Pipestone North program in Grande Prairie, which began last month and is expected to run through June, and Tourmaline Oil Corporation's (Calgary) estimated US$200 million Musreau program near Grande Cache, which is expected to begin in April and run through the end of the year. For more information, see Industrial Info's reports on the Pipestone and Musreau programs.
Tourmaline also is preparing for its estimated US$200 million Gundy Creek drilling program near Dawson Creek, British Columbia, which will kick off in March. Executives at Tourmaline recently pointed to improving natural gas fundamentals for 2021--particularly in markets in the western half of North America, which accounts for 72% of Tourmaline's natural gas sales. "That's where the 2021 gas supply diminishment is anticipated to be the greatest, and hence, the prices the strongest," Tourmaline executives said in a recent quarterly earnings-related press release. For more information, see Industrial Info's project report.
ARC Resources Limited (Calgary) is contracting Precision for two of its projects near Dawson Creek, which sits on the border with Alberta: the estimated US$168 million Dawson program in Rolla and the estimated US$77 million Sunrise program in Farmington. Both projects are set to kick off in April and wrap up in December. For more information, see Industrial Info's reports on the Dawson and Sunrise programs.
Executives from Precision also say the industry is benefiting from the Canadian federal government's $1.7 billion well site abandonment and rehabilitation program, which it believes will support industry activity throughout western Canada. "As the use of service rigs is an integral part of the well-abandonment process, our well-servicing business is positioned to capture these opportunities," the company said in a quarterly earnings-related press release. "Our abandonment service activity increased in the fourth quarter of 2020, compared with the third quarter, and we expect further increases through the end of the well site abandonment and rehabilitation program in 2022."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
