Oil and gas drilling expected to increase slightly this year in Western Canada
Counts will likely increase, but Petroleum Services Association of Canada lowered its forecasts
The Petroleum Services Association of Canada has reduced its forecast for the number of oil and gas wells that will be drilled in Western Canada this year.
The organization now says 7,400 wells will be drilled, down from a forecast last October of 7,900.
The revised forecast is still higher than the 7,094 wells that were actually drilled in 2017.
"Quite frankly it's not very exciting, because we're relatively flat," said Tom Whalen, the president and CEO of PSAC.
"We're only going to project about a six per cent increase over 2017."
Earlier in a news release, he said the oilfield services sector will be "marginally busier," that's not necessarily translating into stronger bottom lines.
He said there are still layoffs in the industry, but not nearly as significant as those in 2015 and 2016.
Whalen points to the price differential between Canadian oil and West Texas Intermediate as a factor in continuing struggles for the industry.
"We had two years of going through hell and now we're in purgatory and we're kind of waiting for something that will help get us out of the situation that we're in," he told reporters on Thursday.
The provincial counts
In Alberta, the association forecasts 3,795 wells will be drilled, down from its original forecast of 4,000. That's up slightly from 2017, when the actual number of wells totalled 3,703.
The forecast is more dire for British Columbia, with an estimated 32 per cent fewer wells compared with PSAC's previous figures.
In 2017, the number of actual wells in B.C. was 610, but PSAC thinks it will drop to 500 this year.
Saskatchewan will likely see an increase in activity this year, with a forecast of 2,840 wells compared with an actual count of 2,526 last year.
That's still lower than PSAC's original forecast of 2,930 wells in the province.
Manitoba is anticipated to see 255 wells drilled, 15 more than in 2017.
The forecasts are based on oil at $61.45 US per barrel, natural gas at $1.75 Cdn per thousand cubic feet and a Canada-U.S. exchange rate averaging 79 cents.
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With files from Anis Heydari