Market Snapshot: Fewer wells account for majority of natural gas production in western Canada


Release date: 2016-01-21

Since 2006, more than 200 000 wells have been producing natural gas in western Canada at any given time. These wells are a mix of old and new, shallow and deep, and produce gas from numerous sourcesFootnote 1. While the total number of wells with natural gas production has been relatively stable from 2008 onwards, fewer new wells are being drilled on an annual basis, and the average new well has become more productive because of advancements in horizontal drilling and hydraulic fracturingFootnote 2.

As a result of this increased productivity, a decreasing number of wells account for the majority of western Canadian production. In 2008, 18 per cent of wells accounted for 80 per cent of production. In 2014, this figure dropped to 13 per cent of wells, and in 2015, it is estimated to be 12 per cent. Despite this declining percentage, total western Canadian natural gas production has actually increased six per cent since 2012 - further evidence of the enhanced productivity of new wells.

Figure Sources and Description

Sources: Divestco, NEB calculations

Description: This chart depicts, from 2000 to 2015, the percentage of natural gas wells that account for 80 per cent of total natural gas production in western Canada as a line chart, and it shows the number of wells with gas production as columns. Since 2008, the number of wells with gas production in any given year has been fairly steady around 235 000. But the portion of wells accounting for 80 per cent of production has been falling as a result of growing well productivity, from 18 per cent in 2008, to 12 per cent in 2015. Note that the 2015 figures are estimates based on available data from January to July.

Historically, western Canadian gas production was dominated by conventional gas. In the early 2000s, average well productivity from mature conventional plays was in decline, which meant more wells were needed to keep production level. However, hydraulic fracturing improved tight well productivity to such a degree that fewer new wells were needed to maintain overall production, and tight wells also became the dominant source of gas production by 2012.

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