While pricing improved quite significantly over the course of the first quarter of 2019, the average active rig count in Q1 2019 was 183 versus 269 in Q1 2018 – representing a 32% decrease year over year. Unfortunately, the downward pricing momentum experienced at the end of 2018 resulted in operators reducing their budgeted capital expenditures and drilling programs for 2019. In Canada, activity has also been restricted due to limited takeaway capacity which for obvious reasons has disincentivized operators from growing production.
That said, the feeling is that there are more reasons to be optimistic than pessimistic given recent pricing improvements, a newly elected government in Alberta that’s taking a hard pro-pipeline and pro-industry stance, positive signals on Keystone, and further LNG development.
As for transactions in the oilfield and industrial industry segments, Q1 2019 saw 99 disclosed transactions with either a Canadian target or buyer. Of the 99 transactions, 12 (12%) were specific to the oilfield services sector – the same number as the previous quarter. A list of all the Canadian oilfield service and industrial transactions in the quarter are included in Appendix B.