Above-average temperatures that are expected to continue in Alberta may be good news for those who hate long winters in Western Canada, but it’s bad news for companies who want to extend their winter drilling programs into March.
As of Monday morning, the Government of Alberta’s Transportation Department implemented road bans for the southern half of the province.
The rig count is still in the 570s, as it had been through February. However, as the rigs working south of Edmonton finish their wells, road restrictions will make it increasingly difficult for the rigs to relocate, according to Raymond James analyst Andrew Bradford. That means the rig count will begin its seasonal decline.
The region includes the newly popular Cardium play southwest of Edmonton. It should see a seasonal slowdown, followed by a pickup in activity when road bans are lifted later this spring, Mr. Bradford told clients.
He points out that while most Western Canadian rigs work north and west of Edmonton, weather forecasters are also calling for above-average temperatures in Grande Prairie in the coming weeks. As a result, Alberta’s thaw line should continue to move northward in the next few days, impacting more and more oil and gas drillers in the region.