Looking through the history of the development activity within the play, an interesting trend can be seen in the Saskatchewan rig-release share of the overall total. Saskatchewan represented about 50 percent of Viking drilling activity in 2009, but that rose to settle at around 80 percent since 2013 where it has since remained. This metric holds true both in terms of annual number of wells rig released but also in terms of annual horizontal meters drilled. This tilt towards Saskatchewan is judged to be in part due to attractive royalty incentives on the Saskatchewan side of the border.
Prior to 2014, half-mile short lateral wells dominated in Saskatchewan. Following 2014 and 2015, longer laterals started to gain traction in the Viking, both in Alberta and Saskatchewan. Prior to 2015 in Saskatchewan, nearly all horizontal development was based on fracture-stimulated half-mile horizontal wells with lateral section lengths averaging around 700m. In 2020 that annual average length has increased to around 1,250m reflecting nearly a perfect bifurcation in approaches between 0.5 mile and 1.0 mile wells. For Alberta earlier in the decade, about 150 wells out of the 2,450 Viking wells in the province were drilled (mainly in the Redwater area) as unstimulated multilaterals with as many as nine legs. In the last couple of years, only a handful of these have been spud and stimulated laterals account for nearly all development activity.
Figure 2 offers some insight as to why companies have moved towards drilling longer laterals in the Viking. Using GLJ’s historical capital cost estimates (including Drill, Complete and Tie-In costs) for both the short laterals (<950 lateral meters) and long laterals (>=950 lateral meters), a cost gap started to emerge in 2014 where longer horizontal wellbores began to enjoy relatively lower development capital costs on a length-adjusted basis compared to their short horizontal peers. It should be noted that capital costs across all Viking well types (similar to most plays) saw a large downward correction in years 2015, 2016 and 2017, following the oil price collapse in late 2014.