Growth of multilateral heavy oil drilling accelerates across Canada in 2024

Canadian exploration and production companies invested their capital to drill oil targets in 2024 as prices remained steady. WTI averaged US$76.55/bbl and WCS slightly over US$61/bbl for the year. The heavy oil differential tightened in 2024 with the startup of the TMX pipeline.

Multilateral heavy oil drilling dominated activity. Operators spud 11,423 oil and bitumen UWIs in 2024, up 12 per cent from 2023. Low natural gas prices, however, resulted in a 25 per cent decrease in gas wells spud, with 1,128 wells spud in 2024, compared with 1,507 wells in 2023. Gas drilling is expected to rise, along with prices, when LNG Canada begins full operations in the second half of 2025.

Multilateral drilling spreads across heavy oil formations

The Clearwater formation was the top target in 2024, with operators spudding 2,844 UWIs. Four of the top five formations drilled in 2024 were heavy oil formations where multilateral technology dominates. The Sparky, Waseca, and Bluesky formations all saw an uptick in wells spud. The Montney remained the top unconventional play, followed by the Viking with oil activity centered in the Dodsland area of Saskatchewan.  Activity also remained strong in the Frobisher oil play in southeast Saskatchewan.

CNRL is top driller

Canadian Natural spud 1,081 UWIs in 2024, making it the top driller. It was followed by Spur Resources, which drilled 836 UWIs. Clearwater-focused operators dominated activity, with eight of the top 10 operators having major operations in the play. Caltex Trilogy made the top 10 drillers based on its multilateral program targeting the Mannville heavy oil stack.