Western Canada Rig Count Climbs to 200, Tops 5-Year Average by 31 Rigs, RBC Says
The WCSB rig count climbed to 200, its highest level this year, as drilling activity across Western Canada continued to outpace expectations, RBC Capital Markets said in a Tuesday note.Canadian oilfield services stocks declined 5% over the week, although the group remained up 34% year to date, compared with a 35.4% gain for the S&P/TSX Capped Energy Index, RBC said.Calfrac Well Services led weekly performance with a 5.0% gain, while Enerflex (EFXT) declined 3.7% and Pason Systems fell 4.4% over the same period, according to RBC.The rig count increased by 11 from the prior week to 200, standing 50 above year-ago levels. Activity also remained well above historical trends, with the count 31 rigs above the five-year average.RBC said drilling activity has exceeded expectations this quarter, with the quarter-to-date average rig count reaching 157 compared with its second-quarter forecast of 143.Private operators added four rigs over the week, while large producers with output above 75,000 barrels of oil equivalent per day increased activity by six rigs.Montney and Duvernay activity eased slightly over the week, with each region losing one rig to end at 35 and 16 active rigs, respectively. ARC Resources operated eight rigs in Montney, while Ovintiv (OVV) ran six and Tourmaline Oil managed four, RBC said.In Duvernay, Canadian Natural Resources (CNQ), Paramount Resources and Whitecap Resources each operated two rigs. Ensign Energy Services remained the largest drilling contractor in the play with five rigs, accounting for 31% of activity, according to RBC.Heavy oil activity strengthened over the week as the rig count increased by two to 47, while Cardium added one rig to six. Canadian Natural Resources led heavy oil drilling with 12 rigs, followed by Spur Petroleum with six and Tamarack Valley Energy with four.Canadian exploration and production companies under RBC coverage are expected to generate CA$8.4 billion ($5.99 billion) in pre-dividend free cash flow in 2026 and CA$8.8 billion in 2027. RBC expects operators to reinvest 60% of cash flow in both years, below the five-year average reinvestment rate of 64%.Commodity prices weakened during the period as the balance-of-2026 West Texas Intermediate strip fell 12.8% over the week to $74 per barrel and 22.1% over the month, while Brent declined 10.5% over the week to $78/bbl and 21.3% over the month, RBC said.Natural gas moved higher, with the balance-of-2026 Henry Hub strip gaining 1.7% over the week and 3.2% over the month to $3.57 per thousand cubic feet. However, the benchmark remained 15.1% below levels seen a year earlier, according to RBC.Provincial drilling activity continued to improve on an over-the-year basis. Alberta added 35 rigs and Saskatchewan gained 14, while British Columbia's rig count remained flat from a year earlier, RBC said.Price: $53.63, Change: $+0.13, Percent Change: +0.24%
