The Petroleum Services Association of Canada (PSAC) has altered their drilling forecast for 2017, and is now projecting a sizable increase for the number of wells to be drilled in Canada.
In the revised forecast released Jan. 30, PSAC calls for 5,150 wells to be drilled (rig releases) this year, which represents an increase of 975 wells, or 23 per cent, from their original 2017 drilling forecast released last November.
PSAC is basing its updated forecast on average natural gas prices of $3 Cdn. per metric cubic foot (AECO), average crude oil prices of $52.50 U.S. per barrel (WTI) and the Canada-U.S. dollar exchange rate averaging $0.73.
鈥淪ome in the Canadian oilfield service, supply and manufacturing sector are realizing some uptick in activity as oil prices recover and operators increase their drilling programs,鈥� said PSAC president and CEO Mark Salkeld.
鈥淭he challenges related to the prolonged downturn took their toll on the oilfield services sector, with the effects rippling across all the supporting industries. It took us many years to recover from a similar but less impactful downturn in the early 1980s and it will be the same again now.聽聽 鈥淭he cost savings exacted from the services sector over the last two-and-a-half years are not sustainable but that will be corrected as activity and the demand for people and equipment increases.鈥�
On a provincial basis for 2017, PSAC now estimates 1,985 wells will be drilled in Saskatchewan, which is a modest increase from the 1,940 that were projected last fall. PSAC projects 2,706 wells for Alberta, up from the 1,900 in the original forecast.
Approximately 31 per cent more wells are called for in British Columbia, thanks to an increase from 280 to 367 wells. Manitoba is forecasted to see 73 wells drilled, which would be an increase of 23.
鈥淲ith luck and the favorable policies from governments in Alberta, Ottawa and Washington, D.C., with respect to the new royalty regime and pipeline approvals, the Canadian oilfield services sector will pick it-self up, dust itself off and get people and equipment back to work,鈥� said Salkeld.
Oilfield services sector jobs come from keeping pipelines full, he said, so it will take some time to realize those opportunities; in the meantime, he said PSAC members are enjoying the winter activity now and look forward to an improved level of activity over the course of 2017.
