The Lloydminster area of western Canada has been hit particularly hard by the downturn. Activity levels have fallen off a cliff since 2014.
Lloydminster area wells drilled by month
For the first 2 months of 2017, 82 wells have been drilled within a 50 mile radius of the city of Lloydminster according to data from the
BOE Report Well Activity Map. This is a major increase from last year’s abysmal 23 wells drilled, however a long way off from 2014 levels when 267 wells were spudded. Most major areas in western Canada have seen activity levels rebound to approximately 50-55% of the activity of 2014 highs.
Valuations in the region have also been low compared to other areas. Where Shaunavon and Viking deals are fetching $50,000-$60,000/BOE/D, assets in the Lloydminster region are valued between $15,000-$35,000/BOE/D range.
The greater decrease in activity levels and valuations is likely due to the oil quality in the area – which tend to be of a much higher gravity with high water cuts. However wells are much cheaper–especially compared to wells drilled into prolific shale plays.