Renewed optimism for energy industry
While it appears there is some good news coming from the Alberta energy industry, it still might take a while for this to catch up in Drumheller.
This week the Petroleum Services Association of Canada (PSAC) released its 2018 drilling forecast and it expects 7,900 rig leases to be drilled in Canada for 2018. It also amended its 2017 predictions, forecasting a total 7,550 wells.
The small uptick in activity we realized in Q1 of 2017 has carried on through the year. 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,” said PSAC president Mark Salked.
In Alberta, this forecast predicts 3,998 wells to be drilled in Alberta, the largest of any province.
While it is good news and tops the number of wells drilled annually over the last three years, it is still 30 per cent lower than the number drilled in 2014.
Brad Peake has been involved in the oil and gas industry locally for many years. He is encouraged by the uptick, but until prices improve more, he doesn’t expect much exploration in the local area. In fact, he divested in some of his gas interests as it was actually trading at negative prices.
“Anything south of Edmonton and west of the fourth meridian and east of the fifth meridian is pretty much done. Unless you are down in Brooks and Tilley, and maybe some stuff in Taber,” said Peake.
Despite this, any uptick is beneficial, as many in the community are used to working in the industry away from home. Already he is seeing work pick up in other communities, and labour is following. Last week it was reported that Alberta added 12,000 full-time jobs.
“It is good news for the province overall,” he said. “There are things heating up in the province, just not here."