FOR IMMEDIATE RELEASE:
CALGARY, AB (October 31, 2017) – Today, the Petroleum Services Association of Canada (PSAC) released its 2018 Canadian Drilling Activity Forecast. PSAC expects a total of 7,900 wells (rig releases) to be drilled in Canada in 2018. For 2017, the Association’s final revised forecast predicts a yearly total of 7,550 wells.
PSAC bases its 2018 forecast on average natural gas prices of $2.50 CDN/mcf (AECO), crude oil prices of US$53/barrel (WTI), and the Canadian dollar averaging $0.82USD.
PSAC President, Mark Salkeld commented, “The small uptick in activity we realized in Q1 of 2017 has carried on through the year. Budgets set with initial optimism for a gradual climb in prices by year-end continue with their plans as drilling and completion efficiencies improve. Due to pressure to stay low, costs for services continue to be suppressed affording better margins for producers. For 2018, confidence that oil will stay in the low-to-mid US$50 range as markets tighten and inventories reduce, along with growing interest in Canada’s vast liquids rich natural gas, should support a 4 – 5 per cent increase in activity levels.”
On a provincial basis for 2018, PSAC estimates 3,998 wells to be drilled in Alberta, and 2,931 wells for Saskatchewan, year-over-year increases of 152 and 84 wells, respectively. At 230 wells, drilling activity in Manitoba is expected to remain constant year-over-year whilst activity in British Columbia is projected to increase from 612 wells in 2017 to 730 wells in 2018.
Although the Association expected 2018’s activity to be better than 2015, 2016 or 2017, the projected total of 7,900 wells is still 30% lower than the number of wells drilled in 2014.
Salkeld continued, “The cancellation of TransCanada’s Energy East pipeline is another blow to investor confidence in Canada and so PSAC will continue to advocate hard for market access and a competitive environment. The world’s energy needs are growing and polls show that countries would prefer Canadian oil and gas that is responsibly-developed and working to reduce carbon emissions through innovation. Market access and development of our natural resources would not only help reduce global emissions and help lift third-world countries out of energy poverty, but would continue to benefit Canadians too by providing energy security, LNG for remote and northern communities, great high-tech jobs and world prices for our resources so that they can continue to provide economic benefits to all Canadians.”
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.
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