More oil wells to be drilled in Canada this year than expected, says PSAC
The Petroleum Services Association of Canada, in its second update to the 2017 Canadian Drilling Activity Forecast, has revised the forecasted number of wells drilled across the country in 2017 by 2,505
CALGARY—The Petroleum Services Association of Canada (PSAC), in its second update to the 2017 Canadian Drilling Activity Forecast, has revised the forecasted number of wells drilled across the country in 2017 from 4,175 to 6,680.
The national trade association based its updated 2017 forecast, a revision to the original forecast released in November 2016, on average natural gas prices of CA$3.00 per thousand cubic feet (Alberta Energy Company), crude oil prices of US$52.50/barrel (West Texas Intermediate) and the Canada-U.S. exchange rate averaging $0.74.
“Never under-estimate the tenacity or efficiency of the Canadian oilfield services sector. The drilling seasons of 2015 and 2016 were difficult to say the very least, and the sector is still making adjustments to manage costs and meet growing expectations of their customers, but with some degree of confidence in $50 oil and the dramatic lowering of costs by the service sector, we are seeing increased activity levels,” said PSAC president and CEO Mark Salkeld.
On a provincial basis for 2017, PSAC now estimates 3,320 wells to be drilled in Alberta, up from 1,900 wells in the original forecast.
Approximately sixty per cent more wells are also expected to be drilled in British Columbia, with PSAC’s revised forecast now at 449 wells for the province up from 280 in the original forecast.
The revised forecast for Saskatchewan now sits at 2,670 wells compared to 1,940 wells in the original forecast.
Manitoba is also forecasted to see 221 new wells, a jump of 171 in well count for 2017.
“We have seen some member companies fail, but we have seen others grow, consolidate and expand. There are certainly fewer oilfield service companies today than there were just few short years ago, but those that remain are the leaders that will continue to succeed in this sector going forward,” said Salkeld.