CALGARY, AB (November 2, 2016) – Today, the Petroleum Services Association of Canada (PSAC) released its 2017 Canadian Drilling Activity Forecast. PSAC expects a total of 4,175 wells (rig releases) to be drilled in Canada in 2017. For 2016, the Association’s final revised forecast predicts a yearly total of 3,950 wells.
PSAC bases its 2017 forecast on average natural gas prices of $2.50 CDN/mcf (AECO), crude oil prices of US$52/barrel (WTI), and the Canadian dollar averaging $0.76USD.
PSAC President, Mark Salkeld commented, “We are seeing a small uptick in activity for 2016/2017 as we head in to our traditional winter drilling and completion season. Beyond that, it is hard to find support for any significant ramp up of activity over what we are forecasting, as geopolitics and increased supply continue to keep commodity prices low, and lack of access to global markets keeps a chokehold on the Canadian industry.”
On a provincial basis for 2017, PSAC estimates 1,900 wells to be drilled in Alberta, and 1,940 wells for Saskatchewan, year-over-year increases of 53 and 240 wells, respectively. Drilling activity in Manitoba is expected to decline by 68% year-over-year, from 74 wells in 2016 to 50 wells in 2017. Activity in British Columbia is also projected to decline from 320 wells in 2016 to 280 wells in 2017.
Although the Association expected 2017’s activity to be better than 2016, the projected total of 4,175 wells is still 63% lower than the number of wells drilled in 2014.
Salkeld continued, “The Canadian oilfield service, supply and manufacturing sector is a leader in providing innovation and technological support for Canada’s responsibly-developed oil and gas resources and like our customers, the producers, we are limited in our growth here in Canada as long as we only have one customer , the U.S., a customer that has quickly become our biggest competitor”. Salkeld goes on to say, “the world needs more Canadian oil and gas and it also needs more of the leading edge technology and expertise that comes from the Canadian oilfield services, supply and manufacturing sector, now more than ever while we have surplus capacity.”
The Petroleum Services Association of Canada is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry. As the voice of the sector, PSAC advocates for its members to enable the continued innovation, technological advancement and in-the-field experience they supply to Canada’s energy explorers and producers, helping to increase efficiency, improve safety and protect the environment. PSAC member companies represent a significant portion of the business volume generated in the oil and gas services industry.