Oil and gas production in the Slave Lake region has diverged over the last five years, with gas production declining by 43.0% between 2004 and 2009, and oil production rising by 3.4% over the same period.  Crude oil production has declined by 33.1% over the last 5 years, while bitumen production has increased by 59.5%.  Between 2008 and 2009, gas production declined by 14.2% while oil production fell by 6.3%.

Slave Lake’s share of overall Alberta gas production was 2.2% in 2009, making it the 9th largest producer out of 14 regions.  Average annual gas prices dropped by 53.3% in 2009 to $3.65 per gigajoule.  So far in 2010, gas prices have averaged $3.73, a slight increase from 2009, and low by historical standards.

The Slave Lake region is the 6th largest conventional oil producing region in Alberta and the 4th largest overall oil producer (combining conventional and oil-sands). The region’s share of Alberta’s conventional oil production was 8.9% in 2009, but its share of total crude oil output was only 5.4%.  Oil prices dropped by 38.0% to US$61.80 per barrel in 2009.  However, so far in 2010 oil prices have averaged $78.96, an increase of 27.8%.

Over the last five years, the number of spudded wells1 in the region has dropped 49.8%. Between 2008 and 2009, the spud count dropped by 51.3% to 263 wells, accounting for 3.6% of the Alberta total. Part of the decline can be attributed to a weak global economy and soft energy prices. However, in the first 10 months of 2010, the number of wells drilled in Alberta rose 44% from the same period of 2009, largely because of a more than doubling in the number of conventional oil wells. The Petroleum Services Association of Canada is forecasting an increase of 5% in 2011 over 2010 for Alberta drilling.  These drilling estimates and forecasts should provide some optimism for oil producers in Slave Lake. 

Economic indicators

The region’s total gas potential represents 6.2% of Alberta’s overall reserves, and oil potential is 12.5% of Alberta’s conventional reserves.

1 A spud is the very beginning of a drilling operation for a well