An oil and gas industry group believes more wells will be drilled in Canada than expected over the next year. The revisions are due to three major oil companies planning higher activity this year.
The Petroleum Services Association of Canada has revised its 2020 Drilling Activity Forecast released in October 2019 to 4,800 wells. This represents an increase of 300 wells, or 7 percent, from PSAC’s original 2020 Forecast.
The company bases its forecast on oil going for $59 U.S. a barrel, the average natural gas prices staying at $1.85 CAD per Mcf and the Canadian dollar at $0.76 U.S.
PSAC President and CEO Gary Mar believes the rapid production will not continue throughout the year.
“Overall, however, although many companies experienced a stronger start to 2020, we believe this is primarily due to work deferred from 2019 Q4 that will not translate into increased activity for the rest of the year.”
Mar says oilfield services companies are looking to repair and maintenance work, closure work and new geothermal projects to survive the sixth year of the oilpatch downturn.
“We absolutely must find a way to get our responsibly developed resources to global markets to help lower GHG emissions by replacing coal and through innovation and technology, while creating jobs and prosperity for all Canadians. There simply is no good reason to do otherwise.”
Provincially, PSAC estimates 2,460 wells will be drilled in Alberta up 14 per cent in the original forecast for 2020. The revised forecast for Saskatchewan now sits at 1,790 wells, down 5 wells from the original forecast, while British Columbia and Manitoba are unchanged at 345 and 190 wells, respectively.