CALGARY – Analysts say Canadian oilfield services companies with operations in the U.S. are now earning more of their revenue south of the border than they have for at least six years.
In a report, AltaCorp Capital says that trend is expected to continue as ongoing oil and gas spending weakness in Canada is balanced against steady activity in the United States.
The analysts say that 12 of the largest Canadian energy services companies with U.S. operations earned 54 per cent of their revenue in the U.S. in 2018, the first time the percentage climbed above half since at least 2013, when it was just over 40 per cent.
They forecast a 16 per cent decline in Canadian drilling rig activity this year to an average of 159 active rigs, while the U.S. average rig count will be 1,009, largely flat versus 2017.
The survey includes large Calgary-based drilling companies like Precision Drilling Corp. and Ensign Energy Services Ltd., as well as well completion firms such as Calfrac Well Services Ltd.
The Canadian Association of Oilwell Drilling Contractors reports that the industry relocated 16 Canadian rigs to the U.S. in 2018, up from six in 2017, and is continuing to send rigs south of the border this year.
Precision Drilling reported drilling rig working days jumped 36 per cent in the U.S. in the last three months of 2018 compared with the same period of 2017, but fell nine per cent in Canada.
Companies in this article: (TSX:PD, TSX:ESI, TSX:CFW)