Substantial increases in demand for Canadian petroleum and natural gas in both domestic and export markets resulted in another good year throughout the main sectors of the industry. In February, production averaged 850,000 bpd, or about 8% more than 1963 output of crude oil and natural gas liquids. Construction began on the first full scale plant for the extraction of oil from the Athabasca bituminous sands. In 1964, exploratory and development drilling in western Canada increased 10% from the previous year. A total of 15.5 million ft was drilled, the largest since the record drilling year of 1956. The main oil field development areas in Alberta were the House Mountain, Deer Mountain and Goose River Fields, and the Bantry-Taber heavy oil region in southeastern Alberta. Oil reserves were increased substantially by waterflood pressure maintenance projects in many of the older oil fields. The largest oil accumulation discovered in 1964 was the Syvia-Honda Field in the Devonian Gilwood sandstone in N.-central Alberta. Two graphs illustrate the crude petroleum in Canada in millions of barrels from 1940 to 1964, and natural gas in Canada in billions of cu ft from 1950 to 1964. The outlook for the industry in 1965 is good.