The Petroleum Services Association of Canada (PSAC) has released its 2018 Canadian Drilling Activity Forecast.
PSAC expects a total of 7,900 wells (rig releases) to be drilled in Canada next year, a slight increase of the association’s final revised forecast of 7,550 wells.
Its 2018 forecast is based on average natural gas prices of C$2.50 per metric cubic foot, crude oil prices of US$53/barrel (west Texas inventory), and the Canadian dollar averaging US$0.82.
“The small uptick in activity we realized in Q1 of 2017 has carried on through the year,” said PSAC president Mark Salkeld. “Budgets set with initial optimism for a gradual climb in prices by year-end continue with their plans as drilling and completion efficiencies improve.
“Due to pressure to stay low, costs for services continue to be suppressed affording better margins for producers. For 2018, confidence that oil will stay in the low-to-mid US$50 range as markets tighten and inventories reduce, along with growing interest in Canada’s vast liquids rich natural gas, should support a four to five per cent increase in activity levels.”
On a provincial basis for 2018, PSAC estimates 3,998 wells to be drilled in Alberta, and 2,931 wells for Saskatchewan, year-over-year increases of 152 and 84 wells, respectively. At 230 wells, drilling activity in Manitoba is expected to remain constant year-over-year, while activity in British Columbia is projected to increase from 612 wells in 2017 to 730 wells in 2018.
Although the association expected 2018’s activity to be better than 2015, 2016 or 2017, the projected total of 7,900 wells is still 30 per cent lower than the number of wells drilled in 2014.
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