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AAPG Bulletin

Abstract


Volume: 66 (1982)

Issue: 11. (November)

First Page: 1756

Last Page: 1764

Title: Oil and Gas Developments in Western Canada in 1981

Author(s): P.W. Hay (2), D.C. Robertson (3)

Abstract:

In 1981, there was a marked slump in drilling activity in western Canada resulting from the combined effects of the National Energy Program (NEP), economic recession, and a worldwide oil surplus. The number of wells drilled dropped by 22% to a total of 6,904. Exploratory drilling decreased 19% to 3,074 wells, and development drilling decreased 25% to 3,830 wells. The exploratory success rate also decreased to 62% in 1981, based on 740 oil discoveries and 1,172 gas discoveries. The development success rate decreased slightly to 88%, with 1,334 oil discoveries and 2,034 gas discoveries. Average well depth increased in 4 of the 5 western areas, but total revenue from land sales plummeted to half of the previous years' record totals. Alberta land sale revenue totaled only $58 million, British Columbia $61 million, Saskatchewan $37 million, and Manitoba $2 million. Average price per hectare also dropped, especially in British Columbia where the average price was off by 80%.

In relative terms, exploratory activity in Alberta and Saskatchewan dropped to 1978 and 1979 levels, while British Columbia activity was the lowest since 1977. Manitoba was the only province to go against the trend, with a record number of exploratory wells and discoveries. In Alberta, significant exploration activity was centered in the Shekilie, Golden-Evi, and West Pembina areas, while major gas discoveries were made at Whiskey and Elmworth, and oil discoveries at Tangent. No significant new discoveries were made in British Columbia or Saskatchewan, but the 1980 Manitoba oil discovery at Waskada continued to stimulate activity. Preliminary results from the Nechako basin drilling in central British Columbia proved to be disappointing with 3 successive dry holes.

In the Arctic Islands, 2 major oil discoveries were made at Skate and Cisco, off Lougheed Island, and a gas discovery at MacLean. Beaufort Sea drilling was hampered by weather, but nonetheless resulted in major oil discoveries at Koakoak and at a Kopanoar follow-up well.

The year 1981 will probably be viewed as a major turning point in exploration in western Canada, with interest shifting from the provinces to the frontiers, and the participants mainly Canadian-controlled companies. Cash flow and drilling activity were markedly reduced, mergers and takeovers common, and major heavy oil and tar sands projects cancelled. The expected downturn in exploration during 1981 took place as predicted, and no improvement is seen for 1982.

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