˝ ˆ ˙˘ ˇ 29, 2014 · Canadian Drilling Activity Forecast to its ... 2015 Canadian Drilling Activity Forecast – published October 29, 2014 18 Area AB1 Foothills Fort Nelson

2015 Canadian Drilling Activity ForecastPublished October 29, 2014

© 2014 Petroleum Services Association of Canada (PSAC) - Reproduction rights reserved. Nothing herein may be reprinted in part or in whole without explicit permission from PSAC.

page 1 Introduction

1 Acknowledgements

2 Methodology – Historical Well Counts & License Data

3 PSAC Area Map

4 PSAC 2015 Canadian Drilling Activity Forecast

8 Wells Drilled Canada – Summary

12 BC British Columbia BC1 Southern British Columbia

BC2 Northern British Columbia

BC3 Coastal British Columbia

18 AB1 Foothills

23 AB2 Foothills Front

29 AB3 Southeastern Alberta

35 AB4 East Central Alberta

41 AB5 Central Alberta

47 AB6 Northeastern Alberta

53 AB7 Northwestern Alberta

59 SK1 Central Saskatchewan

65 SK2 Southwestern Saskatchewan

71 SK3 Eastern Saskatchewan

77 MB Manitoba

83 ON Ontario

88 Eastern Canada Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland & Labrador

93 Northern Canada Yukon, Northwest Territories and Nunavut

2015 Canadian Drilling Activity Forecast – published October 29, 2014

Table of Contents

© 2014 Petroleum Services Association of Canada (PSAC) — Reproduction rights reserved. Nothing herein may be reprinted in part or in whole without explicit permission from PSAC.While all reasonable effort is made to ensure the quality and accuracy of the data, June Warren-Nickle’s Energy Group and PSAC accept no liability for the data contained within this report.

Rig release, Top Operators and license data by June Warren-Nickle’s Energy GroupPSAC Area Map by Digital Projections



Introduction

Purpose

Since 1991, the Petroleum Services Association of Canada (PSAC) has provided the PSAC

Canadian Drilling Activity Forecast to its membership, members of the petroleum industry

and other interested parties. The document estimates upcoming drilling activity levels in

Canada and reports historic activity levels.

Forecasts such as this one can help companies increase sales, streamline operations, set

budgets, analyze competition, define markets, price products and services, determine

geographic focal areas, position personnel and equipment, and identify key trends

affecting the future of the industry.

When used in conjunction with the PSAC Well Cost Study, the PSAC Canadian Drilling

Activity Forecast can be used to determine potential market sizes for drilling and

completion products and services, as well as pricing and activity direction.

Format

Components of the PSAC Canadian Drilling Activity Forecast include a projection of

activity levels for the coming year, as well as a breakdown of historic drilling data for

previous years. The document provides historical drilling activity levels and licensing

information broken down by:

• PSAC’s geographic areas in Canada

• Status (oil, gas, dry, service, standing)

• Status depth

• Developmental and exploratory activity

• Horizontal and directional drilling activity

• Top 20 operators for previous quarter

• Quarterly breakdown of activity

Additional information includes:

• Licenses issued by PSAC area

• Average license to spud days (by area)

• Average spud to rig release days (by area)

Subscriptions

The document is published in electronic format (.pdf) and is updated quarterly

(October, January, April, July). Subscribers receive access to the October forecast and all

of its updates (January, April, July).

Acknowledgements

In acknowledgement of our partners in preparing the 2015 PSAC Canadian Drilling

Activity Forecast, PSAC thanks June Warren - Nickle’s Energy Group for being the official

supplier of all of the rig release and license data. PSAC recognizes Digital Projections for

the development of the PSAC Area Map. Without the support of our partners, this

Forecast could not have been published.

Disclaimer

While all reasonable effort is made to ensure the quality and accuracy of this

document, June Warren - Nickle’s Energy Group and PSAC accept no liability for the

data contained within this report.

More Information

For additional information or comments, please contact:

Mark Salkeld, President

Petroleum Services Association of Canada (PSAC)

1150, 800 – 6th Avenue SW

Calgary, Alberta T2P 3G3

Tel: (403) 781-7383

Email: [email protected]



Well counts are based on a rig release classification, versus well completions. A rig released

well is reported immediately, once the hole has been drilled. Well completions are often not

reported until the well has been completed and is producing, which results in a reporting time

lag. Reporting based on rig release date is beneficial for counting the number of wells that

have actually been drilled to an exact date, with little or no time delay. This methodology

allows PSAC to report in a more consistent manner with other industry forecasts and enhances

reporting accuracy.

June Warren - Nickle’s Energy Group (data supplier to PSAC for this document) receives its

information from government, operating company and drilling rig contractor sources and

reports information to reflect the best available data. Sometimes well status information may

change as new information is received. PSAC updates its data on a quarterly basis to reflect

any changes in well status for previous quarters.

Standing Wells

Since wells drilled are reported as soon as they have been rig released, well status (oil, gas, dry,

service) is sometimes unknown. Wells can be rig released and left standing (drilled and cased),

therefore not producing and not allowing a status to be reported. Wells can also be drilled and

left to be completed at a later date due to infrastructure economics, commodity pricing or

weather conditions. The PSAC Forecast updates unallocated standing wells to the four categories

listed (oil, gas, dry, service), based on the percentage made up by each of those categories.

Service Wells

A service well does not produce oil or gas but is used to inject liquids or gas into the main

producing formation to maintain pressure, enhance recovery, or store or dispose of salt

water and other substances.

Other Wells

Falling into this category are wells for which there has been no exact status defined,

including "tight hole" wells. These wells make up a small percentage, which are added to

the appropriate status count once the status is clarified. The PSAC Forecast updates

unallocated “other” wells to the four categories listed (oil, gas, dry, service), based on the

percentage made up by each of those categories.

SAGD Wells

Both the steam injector well and the producing well are licensed separately and count

as individual wells by the AER and this study.

Licenses Issued

Licenses issued have been calculated based on the license date for which year the

license was issued. Readers must be careful in making assumptions about upcoming

activity levels based solely on licensing information, as licenses get cancelled and do not

have a direct correlation with potential drilling activity.

Average License to Spud Date

The average license to spud date is an average of all wells rig released in the particular

quarter and year in which they are reported. The average license to spud date is

calculated based on the year and quarter in which the well was rig released.

Average Spud to Rig Release Date

The average spud to rig release date is an average of all wells rig released in the particular

quarter and year in which they are reported. The average spud to rig release date is also

calculated based on the year and quarter in which the well was rig released.

Data Collection and Analysis

In calculating the annual well count forecast, PSAC collects input from the following

sources:

• Operators (oil & gas companies)

• PSAC members (roundtable discussions)

• Historical trending analysis by PSAC area

• Current macro-economic fundamentals such as commodity pricing and

commodity supply and demand indicators

Methodology – Historical Well Counts & License Data

Wells Drilled – Rig Releases

Tuktoyatuk

Whitehorse

Yellowknife

FortNelson

FortSt. John

Vancouver

Edmonton

Calgary

Lethbridge

Saskatoon

Lloydminster

Winnipeg Thunder Bay

Toronto

Ottawa

Montreal

Quebec Halifax

Fredericton

Charlottetown

St. John's

ReginaSwift

Current

FortMcMurray

RedDeer

Victoria

GrandePrairie

NT

YT

BC2

BC1BC3

AB6

AB4

AB5AB2

AB1

SK1 SK3 MB

AB7

ON QC

NL

NS

NB

PE

NU

AB3 SK2



PSAC Area Map BC1 Southern British Columbia

BC2 Northern British Columbia

BC3 Coastal British Columbia

AB1 Foothills

AB2 Foothills Front

AB3 Southeastern Alberta

AB4 East Central Alberta

AB5 Central Alberta

AB6 Northeastern Alberta

AB7 Northwestern Alberta

SK1 Central Saskatchewan

SK2 Southwestern Saskatchewan

SK3 Eastern Saskatchewan

MB Manitoba

ON Ontario

Eastern Canada QC Quebec

NB New Brunswick

NS Nova Scotia

PE Prince Edward Island

NL Newfoundland & Labrador

Northern Canada YT Yukon

NT Northwest Territories

NU Nunavut

© 2014 Petroleum Services Association of Canada (PSAC) — Reproduction rights reserved. Nothing herein may be reprinted in part or in whole without explicit permission from PSAC.While all reasonable effort is made to ensure the quality and accuracy of the data, June Warren-Nickle’s Energy Group and PSAC accept no liability for the data contained within this report. For an explanation of “standing wells”, please see page 2.


Area AB1 Foothills

FortNelson

FortSt. John

r

Edmonton

Calgary

Lethbridge

Saskatoon

Lloydminster

SwiftCurrent

FortMcMurray

RedDeer

GrandePrairie

AB6

AB4

AB5AB2

AB1

SK1

AB7

AB3 SK2

Edson

Provost

Geology

Production is predominantly gas (sour),

with varying levels of gas liquids. The

principal zones are the Rundle Group of

the Mississippian and Cretaceous Cardium

and Viking sands.

Area Highlights

Area AB1 encompasses the eastern slopes

and foothills of the Rocky Mountains in

Alberta. Wells drilled here are typically

vertical and some of the deepest in

western Canada. These wells are

technically challenging, and pose both

safety and environmental regulatory

compliance issues. Wellsites are often

remote from towns and service and

supply centres. The cumulative result is

that on a dollar-per-metre basis, this is

the generally most expensive area to drill

in western Canada.

WELLS RIG RELEASED2014 Q3 0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ Total Wells Total Metres Ave. License to Spud Days Ave. Spud to Rig Release DaysGas 0 0 0 0 0 0 0 0 0 0 Directional 2Oil 0 0 0 2 0 0 2 6,598 419 29 Vertical 0Dry 0 0 0 0 Horizontal 4Service 0 0 0 0 Developmental 5Standing 4 16,571 99 39 Exploratory 1Other Status 0 0 0 0 Re-Entry 0Total 0 0 0 2 0 0 6 23,169 206 36 Ave. Metres/Well 3,862

2013 Q3 0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ Total Wells Total Metres Ave. License to Spud Days Ave. Spud to Rig Release DaysGas 0 0 0 0 0 0 0 0 0 0 Directional 1Oil 0 1 1 2 0 0 4 11,251 61 32 Vertical 0Dry 0 0 0 0 Horizontal 4Service 0 0 0 0 Developmental 2Standing 1 4,034 143 0 Exploratory 3Other Status 0 0 0 0 Re-Entry 0Total 0 1 1 2 0 0 5 15,285 77 26 Ave. Metres/Well 3,057

2012 Q3 0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ Total Wells Total Metres Ave. License to Spud Days Ave. Spud to Rig Release DaysGas 0 0 0 0 2 0 2 7,799 38 47 Directional 1Oil 0 0 0 0 1 0 1 3,732 219 56 Vertical 0Dry 0 0 0 0 Horizontal 2Service 0 0 0 0 Developmental 2Standing 0 0 0 0 Exploratory 1Other Status 0 0 0 0 Re-Entry 0Total 0 0 0 0 3 0 3 11,531 98 50 Ave. Metres/Well 3,844

2014 0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ Total Wells Total Metres Ave. License to Spud Days Ave. Spud to Rig Release DaysGas 0 0 0 0 0 0 0 0 0 0 Directional 3Oil 0 0 1 6 0 0 7 22,984 193 37 Vertical 0Dry 0 0 0 0 Horizontal 10Service 0 0 0 0 Developmental 11Standing 6 22,568 83 36 Exploratory 2Other Status 0 0 0 0 Re-Entry 0Total 0 0 1 6 0 0 13 45,552 142 36 Ave. Metres/Well 3,504

2013 0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ Total Wells Total Metres Ave. License to Spud Days Ave. Spud to Rig Release DaysGas 0 0 0 0 0 0 0 0 0 0 Directional 2Oil 0 1 2 6 0 0 9 27,428 137 38 Vertical 1Dry 0 0 0 0 Horizontal 9Service 0 0 0 0 Developmental 7Standing 3 11,330 58 16 Exploratory 5Other Status 0 0 0 0 Re-Entry 0Total 0 1 2 6 0 0 12 38,758 118 33 Ave. Metres/Well 3,230

2012 0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ Total Wells Total Metres Ave. License to Spud Days Ave. Spud to Rig Release DaysGas 0 0 0 0 4 1 5 21,273 43 97 Directional 5Oil 1 0 1 7 2 0 11 34,052 86 44 Vertical 1Dry 0 0 0 0 Horizontal 12Service 0 0 0 0 Developmental 12Standing 2 5,886 47 24 Exploratory 6Other Status 0 0 0 0 Re-Entry 0Total 1 0 1 7 6 1 18 61,211 70 57 Ave. Metres/Well 3,401



Wells Drilled by Area Area AB1 Foothills



Top 20 Operators Area AB1 Foothills

2014 GAS OIL1201- 2201- 3001- 3601- TOTAL 0- 1201- 2201- 3001- 3601- TOTAL WELL TYPE WELL CLASS

Company 0-1200m 2200m 3000m 3600m 4500m 4500m+ GAS 1200m 2200m 3000m 3600m 4500m 4500m+ OIL DRY SERVICE STAND OTHER TOTAL DIR VER HOR DEV EXP RE-ENTLegacy Oil + Gas Inc. 6 6 1 7 7 7Manitok Energy Inc. 1 1 1 2 2 2Tourmaline Oil Corp. 2 2 2 1 1Forent Energy Ltd. 1 1 1 1Shell Canada Limited 1 1 1 1


Company 0-1200m 2200m 3000m 3600m 4500m 4500m+ GAS 1200m 2200m 3000m 3600m 4500m 4500m+ OIL DRY SERVICE STAND OTHER TOTAL DIR VER HOR DEV EXP RE-ENTLegacy Oil + Gas Inc. 5 5 5 5 5Manitok Energy Inc. 1 1 2 2 2 2Tourmaline Oil Corp. 1 1 1 2 1 1 2Blackshale Resources Inc. 1 1 1 1


Company 0-1200m 2200m 3000m 3600m 4500m 4500m+ GAS 1200m 2200m 3000m 3600m 4500m 4500m+ OIL DRY SERVICE STAND OTHER TOTAL DIR VER HOR DEV EXP RE-ENTLegacy Oil + Gas Inc. 1 6 2 9 9 9 9Manitok Energy Inc. 1 1 2 2 1 1 1 1Tourmaline Oil Corp. 2 2 2 1 1 2Direct Energy Marketing Limited 1 1 1 1 1


Company 0-1200m 2200m 3000m 3600m 4500m 4500m+ GAS 1200m 2200m 3000m 3600m 4500m 4500m+ OIL DRY SERVICE STAND OTHER TOTAL DIR VER HOR DEV EXP RE-ENTTourmaline Oil Corp. 4 4 4 3 1 3 1Paramount Resources Ltd. 1 1 1 1 1Talisman Energy Inc. 1 1 1 1 1

PROJECTED DEPTH WELL CLASS0-1200m 1201-2200m 2201-3000m 3001-3600m 3601-4500m 4500m+ TOTAL DEV EXP RE-ENT

2014Q1 2014 0 0 0 4 0 0 4 3 1 0Q2 2014 0 0 1 5 1 1 8 6 2 0Q3 2014 0 0 0 0 3 1 4 1 3 0Q4 2014 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/ATOTAL 0 0 1 9 4 2 16 10 6 0Top 20 Operators Licensed in Q3 2014Tourmaline Oil Corp. 3 1 4 1 3TOTAL 0 0 0 0 3 1 4 1 3 02013Q1 2013 0 0 1 1 2 0 4 1 3 0Q2 2013 0 0 1 2 2 0 5 2 3 0Q3 2013 0 0 0 1 2 0 3 3 0 0Q4 2013 0 0 0 4 3 0 7 3 4 0TOTAL 2013 0 0 2 8 9 0 19 9 10 02012Q1 2012 1 2 0 2 2 0 7 4 3 0Q2 2012 0 0 2 0 0 1 3 2 1 0Q3 2012 0 0 0 1 3 0 4 1 3 0Q4 2012 0 0 0 3 0 0 3 2 1 0TOTAL 2012 1 2 2 6 5 1 17 9 8 02011Q1 2011 0 0 2 0 0 1 3 1 1 1Q2 2011 0 0 0 3 2 0 5 4 1 0Q3 2011 0 0 0 1 4 0 5 3 2 0Q4 2011 0 0 0 5 1 1 7 7 0 0TOTAL 2011 0 0 2 9 7 2 20 15 4 12010Q1 2010 0 0 0 0 0 0 0 0 0 0Q2 2010 0 0 0 0 0 1 1 1 0 0Q3 2010 0 3 5 9 4 0 21 2 19 0Q4 2010 0 0 2 0 3 0 5 4 1 0TOTAL 2010 0 3 7 9 7 1 27 7 20 0



Licenses Issued Area AB1 Foothills



2014 2013 2012 2011 2010Gas Wells 0 0 5 9 10Oil Wells 7 9 11 4 3Dry Wells 0 0 0 0 2Service Wells 0 0 0 0 0Standing Wells 6 3 2 0 0Other 0 0 0 0 0Total Wells 13 12 18 13 15

Wells Drilled Area AB1 Foothills

0

2

4

6

8

10

12

Gas Wells

Oil Wells

Dry Wells

Service Wells

Standing Wells

Other

2012 2013 2011 20102014

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˝ ˆ ˙˘ ˇ 29, 2014 · Canadian Drilling Activity Forecast to its ... 2015 Canadian Drilling Activity Forecast – published October 29, 2014 18 Area AB1 Foothills Fort Nelson