Updated August 2017
The number of shale wells placed on production grew in 2016 to 138, up from 118 in 2015, as producers continue to target liquids-rich shale production. The number of shale wells placed on production is expected to grow throughout the forecast period, reaching 290 in 2026.
The composition of the wells placed on production in 2016 aligns with supply costs, with PSAC Area 2—which has the lowest supply cost—accounting for an estimated 58.9 per cent of total activity, in which activity is primarily focused on the Montney and Upper Mannville Formations. Figure S5.5 [Tableau] shows wells placed on production in 2016 by PSAC area and includes an overlay of the Montney, Upper Mannville, and Duvernay Formations. Well activity for 2015 and 2016, along with expected activity for 2017, is provided by well type in Table S5.2 [HTML] and by area in Table S5.3 [HTML].
Overall, the number of wells placed on production over the forecast period is expected to continue to increase, reaching 1745 in 2026. This estimate is up 5.1 per cent from the previous forecast of 1660 in 2025, primarily as a result of increasing domestic demand, driven by growth in demand from electricity generation. Oil sands demand for liquids, albeit at lower levels than in previous forecasts, also continues to support natural gas drilling. Well activity is forecast to continue to remain focused in the wetter areas of the province. As prices improve over the forecast period, the number of vertical wells placed on production is expected to increase moderately as producers increase low-cost recompletions and drill more low-cost vertical wells, which, due to their lower productivity, require higher prices. However, even with the anticipated increase in vertical wells placed on production, 56 per cent of the wells placed on production in 2026 are expected to be horizontal wells completed using multistage hydraulic fracturing. The ratio of new vertical wells to recompletions is expected to remain well below historical levels because new wells placed on production have shifted to being predominantly horizontal, and fewer new vertical wells are being added.
The number of shale wells placed on production is projected to grow from 185 in 2017 to 290 in 2026 as producers continue to target the Duvernay Formation in PSAC Area 2. Growth in the number of coalbed methane wells placed on production, however, is expected to remain weak throughout the forecast period as a result of higher supply costs.
A breakdown of the number of wells placed on production by year and area can be found in the methodology section.