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Saskatchewan is breaking ground with a new record set for the number of horizontal oil wells drilled in 2010.

Last year, a reported 1,531 horizontal wells representing 56 per cent of a total 2,730 were drilled across the province.

"I think what we're seeing is a news standard in the oil industry with respect to the interest in horizontal drilling," said Bob Ellis, director of public affairs for the Ministry of Energy and Resources.

The increase shows a massive 88 per cent jump when compared to 2009 and a smaller increase of 18 per cent compared to 2008.

Ellis said the drop in 2009 can largely be attributed to the global economic slowdown.

"2009 was a more challenging year for the oil and gas industry, as it was for a lot of our other resource sectors," he said, adding sales of crown petroleum and natural gas rights also took a hit that year. "But the industry kept the faith."

Rising oil prices have helped describe last year as a bounce-back year for the province, making Saskatchewan the second largest oil producer in Canada and the fifth largest among American states and Canadian provinces.

"We've certainly gained a lot more prominence in recent years as an oil producers. We used to be known as wheat country, and we still are, but we're increasingly known as oil country," said Ellis, adding the part of the recovery has been from increased activity around the Bakken formation. "It's a bit of a combination between technology being more widely adopted by the industry and improving oil prices that have seen an industry move to horizontal drilling. It's certainly a technique that's helped open up our Bakken formation."

Horizontal oil well drilling has helped the Bakken go from producing 940 barrels a day 2004 to 62,000 a day last year, an important number considering the formation is considered one of the biggest in North America.

Out of 1,531 oil wells drilled in the Lloydminster and Kindersley area, 139 were horizontal.

Mike Ferguson, director of petroleum royalties, said the numbers are slightly less than other areas of the province because the industry is based more on heavy oils.

The amount of vertical oil wells drilled in the region totaled 818 or 68 per cent of the province's 1,199 wells.

"Vertical drilling is still very, very prominent in terms of what's happening across the province," said Ferguson, adding horizontal wells have access to more of a formation. "They're getting the cost down and learning to use it to take them exactly where they want to go."

The idea of horizontal oil well drilling was born in Saskatchewan in the late '80s when companies were trying to extra oil from 'tight' formations.

Source: Lloydminster Meridian Booster

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