Ensign Energy Services Inc., which currently operates three rigs in southeast Saskatchewan and seven in western Saskatchewan, is looking to expand its fleet again after dramatic shrinkage during the downturn.
Nearly two years ago, Ensign cut up 13 drilling rigs in southeast Saskatchewan for scrap at its Oxbow yard. The rigs went under the hydraulic shears starting in January 2016.
The company currently has 70 rigs in Canada, down from 83 in 2016. It has a further 84 rigs in the United States, down from 90 a year ago. It鈥檚 international rigs total 46, down from 50 in 2016.
On the service rig side, in Canada, it dropped from 71 to 65 service rigs over the same period. U.S. operations added a rig, to 45.
Operating days across the company's fleet were higher in the third quarter of 2017 when compared to the third quarter of 2016 due primarily to increased demand for oilfield services caused by a modest price recovery of crude oil and natural gas commodity prices, the company said in a release.
With a smaller drilling fleet, their operating days increased 63 per cent in Canada, from 1,073 to 1,744 operating days for the first three quarters of 2017 compared to 2016. Operating days in the United States almost doubled, from 1,586 to 3,035. International operating days dropped slightly, from 1,521 to 1,475 days.
鈥淭he process of turning over our fleet to high specification, high quality ADR (advanced drilling rig) drilling rigs is contributing to higher market share in all areas of our business. One new advanced drilling rig was added to the Canadian fleet in 2017.
Subsequent to Sept. 30, 2017, the company deployed on new ADR 1000 in Canadaand is currently in the process of completing one additional new ADR 1500 for the United States, which is expected to begin work in the fourth quarter of 2017. The new rigs were partially assembled from equipment that was part of the rig build program that the company halted in 2014 to preserve the balance sheet in a declining market.
The company said in a release that as a result of global oil production gains, flat to decreasing drilling rig counts in聽the United States, increased drilled but uncompleted wells and geo-political tension WTI crude oil prices continue to range between聽$45 -$55. The expectation for 2018 is that these levels will continue into the near future and recent oil price estimates by commodity analysts have continued to trim their 2018 forecasts for WTI to an average of mid to low $50's. Lower for longer continues to be the motto for many companies including Ensign, and its managements believes the structural changes made during the downturn will better position Ensign to capitalize on future opportunities. Pricing in 2018 and capital spend by the company's customers is unclear at this point and will likely be similar to 2017 spend, unless commodity pricing changes.
