Updated June 2024
Summary
The number of new gas wells placed on production in 2023 decreased by 3%. Wells that have been physically connected to gathering infrastructure and are reporting production. This includes newly drilled wells that have been placed on production and recompletions into new zones of existing wells. A significant decrease in prices for natural gas reduced capital spending, while the relatively high liquids prices supported drilling activity in the liquids-rich areas.
Figure S5.5 shows the number of new natural gas wells placed on production and the Alberta plant gate price.
Well activity is shown by well type in Table S5.1 and by Petroleum Services Association of Canada (PSAC) area in Table S5.3
Well Activity in 2023
In 2023, 921 natural gas wells were placed on production in Alberta (Table S5.1). Horizontal wells accounted for 89% of new wells, of which 95% were completed using horizontal multistage fracturing (HMSF), the dominant technology since 2011. These wells use long horizontal legs to reach across large sections of the gas-bearing formation, increasing their productivity.
Nearly 90% of all new HMSF wells placed on production were in the Foothills Front and Northwestern Alberta areas (PSAC 2 and 7). These areas have the highest levels of natural gas liquids (NGLs) content in the raw gas stream and the highest productivity rates.
Vertical wells typically target shallower formations with lower liquid content and generally lower productivity rates than horizontal wells. In 2023, new vertical wells in the province were primarily in the Southeastern Alberta, Central Alberta, and Foothills Front (PSAC 3, 5, and 2). New vertical wells placed on production decreased by 2.9% in 2023, as the price of natural gas significantly decreased last year.
Table S5.1 shows Alberta’s average daily marketable gas production and number of new wells placed on production by year.
Figure S5.6 shows the distribution of wells commencing production in 2023 by PSAC area.
Forecast for 2024 to 2033
The number of wells placed on production is expected to decline slightly in 2024 before growing moderately over the forecast period. A recovery in prices for natural gas and NGLs, plus a positive outlook for natural gas demand, support this increase.
We estimate 1140 new wells to be placed on production by the end of the forecast, representing a 24% increase from 2023. Around 78% of the new wells will be HMSF wells and concentrated in the Foothills Front (including new shale gas wells) and Northwestern Alberta PSAC areas.
PSAC 2 and 7 will continue to be the focus of new gas developments in the province. The high NGLs content of the gas and high productivity of new wells are key to their appeal, plus accessibility and availability of the processing and transport infrastructure and the continued consolidation of operators in these areas.
Table S5.3 shows the forecast number of new wells placed on production by PSAC area.
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- Methodology
- Data [XLSX]
