Canadian Rig activity falls to lowest April level since 1999

Vancouver (Platts)--26Apr2007

Canadian rig activity has fallen to its lowest April level since 1999,
contributing to another sharp downward revision in 2007 well completion
forecasts by the Petroleum Services Association of Canada.

With the decline in natural gas drilling more than offsetting a projected
15% gain in oil drilling, PSAC said April 26 it now expects 19,200 wells
across Canada this year, off 18% from 2006 and a further slippage from the 15%
drop originally forecast.

The most recent industry statistics show only 140 of Canada's 870
available rigs were at work, a drop of 28 percentage points from a year ago.
The utilization rate is lower than any level in 2006.

PSAC, basing its outlook on WTI oil prices of US$62/b and AECO gas prices
of C$7/Gigajoule, is projecting 14,025 wells in Alberta (down 20% from 2006)
and 790 in British Columbia (off 43%).

In Saskatchewan the numbers are virtually the same as 2006 at 3,810,
propped up by a surge in oil activity which PSAC expects will results in 1,000
more wells this year, up 15% from last year.

PSAC president Roger Soucy said in a statement that the major factors
bearing on activity levels are commodity prices and a combination of weather,
a lack of new small producer investment and overhanging environmental
regulations.

"The operators lost confidence in the gas pricing sometime early last
summer," he said. "They have decided to stay with their budgets of last fall
until they become confident that gas prices will stay at these levels and
maybe increase a little before considering activity increases."

-- newsdesk@platts.com