Canada and United States Rig Activity as of 12/06/24

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This Week’s Commentary

Two contrasting trends for weekly rig activity in Canada leading into the Christmas holidays. Having exceeded the three-year trend for much of the Summer and Fall, oil-specific rigs are at 224 this week, up 4 from the same period a year ago. While year-end rig activity historically narrows before accelerating to start the new year, the downward trend is somewhat unnerving given Prime Minister Trudeau’s unscheduled meeting with President-elect Donald Trump following his suggested 25% tariff on Canadian exports. My take is that Trump intends to wield America’s bargaining power with foreign trade, and given Canada’s limited market alternatives for oil exports Canadian E&Ps are precariously exposed to America’s tariff policy implications. While the release of 2025 Canadian E&P capital budgets forecasts static YoY Capex coupled with modest production growth, these budgets would be materially reduced should Trump proceed with a 25% tariff on Canadian commodities.

Or maybe I’m just being overly pessimistic of a weekly rig trend. The counter to the oil-specific rig trend is the steady, incremental rise in gas-specific rig activity as there were 70 gas-specific rigs drilling this past week. Gas-specific drilling has languished below the three-year trend through much of the Fall season, however, the past three weeks has seen the rig trend improve within the three-year average. Considering where AECO prices have resided for the past four months and the pending demand intake to support LNG Canada as well as new gas plant capacity, the uptick in gas-specific rig activity bodes well heading into the Winter drilling season.

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Baker Hughes Rig Count

• Current week total rig activity was at 192, up from 203 rigs the previous week

• Rig adds were in Central AB (+1), and Central SK (+1)

• Rig reductions were in Foothills (-1), East Central AB (-1), NE AB (-4), SW SK (-3), SE SK (-3) and MB (-1)

Rig Count by E&P (as categorized by OilGasPages.com)

• Rig activity for the week of 12/06/24 by Canadian Companies Mentioned totaled 101, up from 99 rigs from the prior week

• Rig count leaders by E&P include TOU (16), CVE (15), CNQ (12), WCP (12) and VRN (7)

• Rig adds were WCP (+3), TOU (+2), CNQ (+1), CVE (+1) and ATH (+1)

• Rig reductions were BTE (-2), PEY (-1), VRN (-1) and TVE (-1)

• Among US-based E&Ps operating in Canada, COP continues to operate 4 rigs, OVV operates 3 rigs and MUR operates 1 rig

United States Baker Hughes Rig Count (as of 12/06/24)

• Current week total rig activity was at 589, up from 583 rigs the previous week

• Rig adds were in the Bakken (+1), Anadarko (+1), Marcellus (+1), Permian (+1) and Other - Texas (+2), Louisiana (+1), California (+1) and Utah (+1)

• Rig reductions were in DJ Niobrara (-1), Other - Wyoming (-1) and Oklahoma (-1)

Rig Count by E&P (as categorized by OilGasLeads.com)

• Rig activity for the week of 12/01/24 by Companies Mentioned totaled 298, down from 299 the previous week.

• Rig count leaders by E&P, and aggregated by proposed merger include XOM (37), COP (36), OXY (30), DVN (24) and EOG (23)

• No rig adds this week

• Rig reduction was MUR (-1)

United States Frac Spreads (as tabulated by The American Oil & Gas Reporter)

• Frac spread activity for the week of 12/01/24 was 220, up 5 frac spreads from the previous week (215).

Canada & United States Companies Mentioned

• Tourmaline Oil Corp. (TOU)

• Canadian Natural Resources Limited (CNQ)

• Cenovus Energy Inc. (CVE)

• ARC Resources Ltd. (ARX)

• Baytex Energy Ltd. (BTE)

• Veren Inc. (VRN)

• Peyto Exploration & Development Corp. (PEY)

• Tamarack Valley Energy Ltd. (TVE)

• Whitecap Resources (WCP)

• Paramount Resources Ltd. (POU)

• Birchcliff Energy Ltd. (BIR)

• Vermilion Energy Inc. (VET)

• NuVista Energy Ltd. (NVA)

• Suncor Energy Inc. (SU)

• MEG Energy Corp. (MEG)

• Imperial Oil Resources (IMO)

• Athabasca Oil Corporation (ATH)

• ConocoPhillips Canada Resources Corp. (COP)

• Ovintiv Canada Ulc (OVV)

• Murphy Oil Corp (MUR)

• Exxon Mobil Corporation (XOM)

• Chevron Corporation (CVX)

• Expand Energy (EXE)

• EOG Resources, Inc. (EOG)

• EQT Corporation (EQT)

• Occidental Petroleum Corporation (OXY)

• Coterra Energy Inc. (CTRA)

• Devon Energy Corporation (DVN)

• Antero Resources Corporation (AR)

• Diamondback Energy, Inc. (FANG)

• APA Corporation (APA)

• Range Resources Corporation (RRC)

• Comstock Resources, Inc. (CRK)

• Permian Resources Corporation (PR)

• Matador Resources Company (MTDR)

• Civitas Resources Inc. (CIVI)

• CNX Resources Corporation (CNX)

• Chord Energy Corporation (CHRD)

• Magnolia Oil & Gas Corporation (MGY)

• SM Energy Company (SM)

• Crescent Energy Company (CRGY)

• High Peak Energy Inc. (HPK)

_{Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Patrick Enwright accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Patrick Enwright makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.}