PSAC cuts 2015 Canadian drilling forecast in half
CALGARY, Alberta – In its mid-year update to the 2015 Canadian Drilling Activity Forecast, released Thursday, the Petroleum Services Association of Canada (PSAC) is forecasting a total of only 5,320 wells to be drilled across Canada in 2015. This decrease of 4,780 wells from PSAC’s original drilling forecast, released in October 2014, represents a 47% drop.
“It’s no surprise that an almost 44% drop in oil prices has led us to forecast a similar decline in drilling activity for the year, compared to our October 2014 forecast,” Mark Salkeld, president and CEO of PSAC, said.
On a provincial basis for 2015, PSAC now estimates that 2,976 wells will be drilled in Alberta, down from 5,740 wells in the original forecast.
In Saskatchewan, the expected well count is now 1,507 wells, less than half of the 3,365 wells in the original forecast, while Manitoba is forecasted to drill 270 wells, down by 160 wells from the original forecast.
The outlier is British Columbia, which is expected to have a marginally increased 2015 well count, from 555 wells to 560 wells.
“The interesting outcome from this downturn will be the innovative actions taken by companies to lower costs and create efficiencies that will better position Canada in the world of energy services, extraction and production,” said Salkeld. “When prices rebound, these companies will be more than ready—no doubt about it.”
PSAC is basing its updated 2015 forecast on average natural gas prices of C$2.50/mcf (AECO), crude oil prices of U.S.$53/bbl (WTI) and the Canadian dollar averaging C$0.77 per U.S. dollar.
The Petroleum Services Association of Canada is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry.