The year of 1976 was a record drilling year. A total of 5,561 wells were drilled, an increase of 1,456 wells over the previous year. Exploratory wells totalled 2,459, an increase of 49.5% and development wells totalled 3,690, an increase of 39.3% over 1975. There were 183 oil discoveries and 1,126 gas discoveries for an exploratory success ratio of 53.2%. In development drilling, 566 oil wells and 2,502 gas wells were completed for a success ratio of 83.3%. The majority of exploratory drilling was in Alberta, where 2,132 exploratory wells were drilled. In this province, exploration was concentrated on natural gas with numerous trends being followed. Very high prices were paid for acreage favorable for natural gas exploration and development. Intense development of the shallow Cretaceous Bluesky Sand gas play continued in the Keg River area of northern Alberta. There was also a major deep drilling program under way, centred on Devonian, Triassic and Lower Cretaceous gas accumulations of the deeper part of the Alberta basin and on the thrust fault structures of the Foothills belt. In Alberta, there was also a large development well program aimed at placing the numerous known gas fields on production. There was a significant increase in exploratory drilling on favorable gas trends in British Columbia. Emphasis was on the Devonian Slave Point formation at moderate depths in the Helmet area and on two deep Foothills trends. The majority of drilling in Saskatchewan was for Lower Cretaceous heavy oil in the western part of the province. An interesting Winnipegosis (Middle Devonian) discovery was made in the eastern part of Saskatchewan, which holds some promise of establishing a new trend. In Manitoba, there was a minor amount of exploration for Mississippian oil. The only continuing exploration in the Arctic was by Panarctic Oils, who concentrated on building up reserves in areas where oil or gas had already been found. This resulted in major extensions and a new deep zone being found in the Hecla gas field, which has now reached "giant" status. A third producer was drilled in the Bent Horn oil field on Cameron Island. In the onshore Mackenzie Delta, two oil discoveries were made and offshore in the Beaufort Sea there were two gas discoveries. In Ontario, exploration for and development of shallow Silurian gas plays continued at the same level as the previous year. A major part of this activity was in the offshore waters of Lake Erie. In Quebec, exploratory drilling by SOQUIP for natural gas in the St. Lawrence lowlands resulted in two extensions to a previous Trenton discovery at St. Flavian near Quebec City. Ten wells were drilled in the offshore area of Eastern Canada, of which five were on the Scotian Shelf, one in the Cumberland Basin and five on the Labrador Shelf. One gas discovery, Eastcan Snorri J-90, resulted from this drilling. Geophysical activity was at a somewhat higher level than last year, but did not show any trend towards increasing as the year progressed. Production of liquid hydrocarbons was again down about 11% from the previous year. There were further reductions in export of oil to the United States but with the completion of the Ontario-Montreal pipeline, oil began flowing to Quebec. On the other hand, natural gas production increased by 8%, the increase being mainly from Alberta fields. Proven and probable reserves of crude oil continued their decline and natural gas liquid reserves also declined slightly. However, for the third year running, gas reserves increased. Proven reserves after production rose by 1.31 Tcf while probable reserves rose by 4.89 Tcf, the latter increase resulting largely from the inclusion of more large Arctic Island reserves.