The Petroleum Services Association of Canada (PSAC) released its midyear update for the 2018 Canadian Drilling Activity Forecast on Thursday afternoon, and lowered the forecast for the number of wells drilled (rig released) across Canada for 2018 to 7,400 wells - a drop of 500 or six per cent from the original forecast of 7,900 wells, made October 2017.聽
PSAC has based its updated forecast on an average natural gas price of C$1.75 CDN per metric cubic foot (AECO), a crude oil price of US$61.45/barrel (west Texas inventory), and a Canada-U.S. exchange rate averaging $0.79.
鈥淲hile our oilfield services sector is marginally busier than it was last year at this time, this hasn鈥檛 necessarily translated into financial bottom lines that signal business sustainability,鈥� said Tom Whalen, the president and CEO of PSAC.
鈥淚n fact, we still have a number of services companies making staff reduction adjustments of five to 15 per cent. This pales in comparison to the 40-60 per cent staff reductions we saw mid-2015 to the end of 2016, but still a very telling sign that our services sector is far from healthy.鈥�
On a provincial basis for 2018, PSAC now estimates 3,800 wells to be drilled in Alberta, down from 4,000 wells in the original forecast. Approximately thirty-two percent (32%) less wells are expected to be drilled in British Columbia, with PSAC鈥檚 revised Forecast now at 500 wells, down from 730 in the original forecast. The revised forecast for Saskatchewan now sits at 2,840 wells, compared to 2,930 wells in the original forecast, and Manitoba is forecasted to see 255 wells or a jump of 25 in well count for 2018.
Next week鈥檚 edition of the Mercury will have more on this story.
