Crude pricing decreased moderately quarter over quarter while the average active rig count in Q2 2019 fell to 88 rigs versus 108 rigs in Q2 2018, representing a decrease of 18%. In Canada, activity continues to be restricted due to limited takeaway capacity and consequently government mandated curtailments. As a result, operators are disincentivized to increase production. That said, the success of the curtailments can be seen in the form of reduced pricing discounts on Canadian crude blends. As an example, Western Canadian Select has been discounted by an average $12/bbl versus WTI over the curtailment period compared to $27/bbl during 2018.
Should the U.S. and China sort through trade discussions, global crude pricing could see a lift as tensions are restraining global growth and as a consequence, demand for oil and gas. In Canada, the good news is that the Trans Mountain Pipeline Expansion looks to be poised to ramp-up construction activities later this year and LNG Canada continues to move along.
As for transactions in the oilfield and industrial industry segments, Q2 2019 saw 83 disclosed transactions with either a Canadian target or buyer. Of the 83 transactions, only 5 (6%) were specific to the oilfield services sector. If you’d like to see the list of transactions, please email us and we’d be happy to share them with you.