Managing Director at ARC Financial Corp on the definition of “rig productivity”

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“The notion of ‘rig productivity’ has to be taken with caution.  We can’t assume that the best-posted performance in the field is the norm for all wells…There is a statistical distortion at play. Starting in late 2014, the severe downturn in oil prices forced the industry to park three-quarters of their rigs and ‘high-grade’ their inventory of prospects. Producers focused on only their best rocks, drilling with only the most efficient rigs. All the low productivity stuff was culled out of the statistical sampling, skewing the average productivity numbers much higher.”

Peter Tertzakian, Chief Energy Economist, and Managing Director at ARC Financial Corp