There鈥檚 no avoiding it, it鈥檚 just a matter of surival.
The drilling forecast for 2015, produced by the Petroleum Services Association of Canada, shows a major decrease in wells created, a result of the current glut in oil production that鈥檚 emerged, due largely to a simple lack of demand, and according to PSAC president and CEO, Mark Salkeld, there鈥檚 no indication that prices are going to rebound any time soon.
鈥淭he stage is set right now for low oil prices,鈥� he said, adding that on a minor high note, the industry closed out the year of 2014 better than originally expected back in October.
In Saskatchewan, and more prominently in the areas surrounding the Energy City, work in the oilfields is continuing at a steady rate, but a tough first and second quarter is expected.
鈥淲e鈥檙e bracing for pain,鈥� Salkheld said. 鈥淭hese companies are getting as much work done as they can now before the slowdown and at the same time, they鈥檙e coming up with strategies to retain employees because this will turn around, and you need key people in place to make that happen.鈥�
Jim Kopec, general manager of Panther Drilling Corp., said work has been lined up for the near future and that three out of their four rigs are currently operational. The loss of some workers has been a set back, but it鈥檚 one that Kopec has seen numerous times while working in the drilling industry, an industry, he added, that鈥檚 seen far more ups and downs in the past.
鈥淲e had one rig working for one company for four years, going into its fifth, but 20 years ago that was unheard of,鈥� he said. 鈥淲e have such a good workforce, and you hate to lose them, but I鈥檝e been involved with oilfield drilling for 40-some years and that鈥檚 just the industry.鈥�
Kopec said since his involvement with the drilling industry, the past 12 years have been the most consistent in terms of oil prices and their direct effect on Panther鈥檚 business, which in 2009, when oil prices crashed and fell below $40 per barrel, was still functioning admirably with the boom in the Bakken.
The vast landscape of oilfields聽in the southeast Saskatchewan has seen the excitement surrounding it diminished dramatically. Combined with the growing number of drilling companies in the area, adversity in the business is expected.
鈥淵ou just have to remain optimistic,鈥� Kopec said.
PSAC鈥檚 drilling forecast, when compared with drilling forecasts produced by the Canadian Association of Petroleum Producers and the Canadian Association of Oilwell Drilling Contractors, both of which forecast steeper declines in activity than PSAC, is a message of hope for the not-so-distant future.
鈥淲e might gain normality in prices sooner than later, but it鈥檚 going to be tough,鈥� Salkeld said.
The annual drilling forecasts are based on natural gas prices, crude oil prices and the Canada-US exchange rate. In addition, PSAC uses relationships with members of the oilfield sectors across Western Canada to gain an understanding of where each of them stands in terms of activity.
鈥淲e talk to these guys from Weyburn and the Estevan area, and we get a sense of the up front, front line perspectives,鈥� Salkeld said.
Following a number of focus group discussions and the massaging of 鈥渕assive鈥� amounts of data, a prediction is made.
