An updated drilling forecast released this afternoon by the Petroleum Services Association of Canada is reporting further declines in expected activity.
Following a January forecast, which decreased drilling projections by about 25 per cent, PSAC's update is calling for a projected decline of another 30 per cent. In Saskatchewan, that may mean less than half of the originally projected 3,395 wells will be drilled this year. PSAC's figures put the provincial projections at 1,507 for 2015.
According to a PSAC press release issued this afternoon, "PSAC is basing its updated 2015 forecast on average natural gas prices of Cdn $2.50/mcf (AECO), crude oil prices of US $53/barrel (WTI) and the Canadian dollar averaging Cdn $0.77 per US dollar."
PSAC President and CEO Mark Salkeld said, “Oil prices dropped from an average of US$84.40 in October 2014 to an average of US$47.83 in March 2015. It’s no surprise that an almost 44 per cent drop in oil prices has led us to forecast a similar decline in drilling activity for the year, compared to our October 2014 forecast.”
See next week's Mercury for a full story on PSAC's updated projections.