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In 1982, petroleum industry activity in western Canada continued to decline as a result of economic recession, dropping oil and gas prices, high interest rates, and a worldwide oil surplus. Many smaller companies disappeared, and staff cuts were common throughout the industry. The total number of wells drilled dropped 9% to 6,285. Exploratory drilling decreased by 26% to 2,288 wells, whereas development drilling increased 4% to 3,997 wells. The exploratory success rate increased from 62 to 65% in 1982, with 761 oil discoveries and 732 gas discoveries. The development success rate increased slightly from 88 to 89%, with 1,742 oil completions and 1,823 gas completions. A late surge in drilling resulted from provincial and federal incentive programs designed to stimulate act vity. Average well depth decreased in all areas, and total revenue from land sales continued to plummet. Alberta land sale bonuses totaled $334 million(FOOTNOTE 4), British Columbia $17 million, Saskatchewan $34 million, and Manitoba $1 million. Average price paid per hectare dropped substantially in the 3 westernmost provinces, but increased by 75% in Manitoba. Number of hectares for sale declined in all areas.
Downward exploratory drilling trends, which began in 1981, were accentuated in 1982. Alberta, Saskatchewan, and British Columbia activity dropped markedly, but Manitoba activity more than doubled. In Alberta, drilling was more cautious, with increased development drilling and fewer dry holes. A significant Devonian pinnacle reef oil discovery was made by Gulf Canada in the Fenn-Big Valley-Rumsey area, and major activity continued to be concentrated in the Peace River arch, Shekilie, and West Pembina areas. The $13.5 billion Alsands project was canceled. No discoveries of major significance were made in either British Columbia or Saskatchewan. Manitoba activity continued to soar for the third consecutive year as a result of the 1980 Jurassic oil discovery at Waskada.
In the Arctic Islands, a major stepout oil discovery was made at Cisco, off Lougheed Island, and gas was discovered at Sculpin, near Ellef Ringnes Island. Beaufort Sea stepout oil discoveries were made at West Atkinson and Tarsiut. Delineation drilling on the Tarsiut structure has been disappointing and estimated reserves are less than anticipated. Future major exploration activity in the Beaufort Sea will continue as a result of several large farmouts by Esso and Gulf to Canadian consortiums. Esso also has a major development drilling project in the old Norman Wells oil field astride the Mackenzie River.
The year 1982 was a pronounced continuation of 1981, with exploration interest shifting from the provinces to the northern and eastern frontiers. Within the provinces, drilling shifted markedly to oil plays, because of the depressed gas market, while expenditures were down significantly. The downturn in exploration appears to have ended, in part due to provincial drilling incentives, but no major improvement in activity is predicted for 1983.
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