Opinion

Who pays the highest drilling rig rates in Western Canada?


Drillers of horizontal wells in Northern British Columbia face, by some distance, the highest average day rates for rigs in Western Canada, according to new data.

The Petroleum Services Association of Canada's (PSAC) new Well Cost Study for Winter 2016 reveals that rig day rates in Northern B.C. can average up to 60% more expensive for horizontal drilling than the equivalent costs in other Western Canadian PSAC regions.

Rig day rates are among more than 100 drilling and completion cost components for around 50 type wells across Canada included in the PSAC study. Combined, they deliver a comprehensive insight into drilling and completion costs faced by operators today. Click here to access the PSAC Well Cost Study.

“PSAC's winter drilling and completion data reveals important insights on the challenges faced by horizontal drillers in Northern B.C. compared to counterparts in Alberta. The day rates show a significant disparity in costs to develop assets,” said Reservoir Development expert Karl Norrena, Manager, New Product Development, at JWN Energy Group.

Each of the four type horizontal wells in Northern B.C. (see “BC2” on the chart below) face daily rig costs that are typically 60% higher than the two cheapest regions in the PSAC study – East Central Alberta (AB3) and Manitoba – where costs are more in line with a vertical well.


Source: PSAC Well Cost Study, Winter 2016 – powered by CanOils. Find out more here and access sample data. Note: Not all PSAC regions are included on this chart as they either only had vertical type wells included in the study, or they did not have a type well included in the study at all.

The four typical wells in Northern B.C. also face among the highest overall rig costs, i.e. the day rate multiplied by the number of days for which the rig is required. They are among wells with the greatest overall measured depth, which means they take longer on average to drill, and therefore require a rig for more days. The total measured depth is the combined length of both the vertical and horizontal portions of the wellbore.

The top 10 type wells included in the PSAC Study ranked in terms of overall rig costs are listed below.


Source: PSAC Well Cost Study, Winter 2016 – powered by CanOils. Note: The rig day rate percentages take the lowest cost rig rate for horizontal drilling in Western Canada (see map below) as the base rate (0%).

The actual rig costs involved, as well as the total measured depth and the number of days the rig is required are all provided in the PSAC Well Cost Study. The PSAC Well Cost Study is available for purchase now. Click here to learn more and access sample data.



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