Market Snapshot: New wells will comprise up to 1/3 conventional, tight, and shale oil production in western Canada by end of 2017

Release date: 2016-03-24

The production from new conventional, tight, and shale oil^Footnote 1 wells expected to be drilled between May 2015 and 2017 is projected to account for one third of total western Canadian production by the end of 2017. In other words, if no new wells were drilled after May 2015, combined production from these various non-oil sands methods in December 2017 would be 0.67 million barrels per day (MMb/d) instead of the projected 1.01 MMb/d.^Footnote 2

A typical oil well’s production is highest in its first few months and then declines thereafter. About 70 000 wells were producing oil in western Canada as of April 2015, most of which were slowly declining. However, because modern tight oil wells can produce at very high rates over their first year of production, it only takes a few thousand wells to be drilled in a year to keep overall production relatively stable.

The number of new wells drilled in 2015, 2016, and 2017 is expected to be around 2 400 each year – much lower than the 5 941 new wells in 2014. In the current low price environment, companies are reducing overall drilling and focusing on their most economic prospects. Technology and field operations also continue to improve. Combined, these factors are expected to increase productivity on a per-well basis. However, the low price environment is also expected to discourage enough new wells from being drilled to keep overall production from declining. New production is expected to be comprised mainly of continued and expanded enhanced oil recovery projects in Saskatchewan^Footnote 3 along with some continued conventional oil production in Alberta.

Date modified:

2023-11-28