PSAC re­vises fore­cast for qui­eter drilling year

The Southwest Booster - - FRONT PAGE -

Cy­press Hills MLA Doug Steele, who serves as the Leg­isla­tive Sec­re­tary to the Min­is­ter of En­ergy and Re­sources, par­tic­i­pated in the Southwest lis­ten­ing tour this past week.

In their third up­date to their 2018 Cana­dian Drilling Ac­tiv­ity Fore­cast re­leased on July 31, the Petroleum Ser­vices As­so­ci­a­tion of Canada (PSAC) de­creased their drilling ac­tiv­ity fore­cast. They were an­tic­i­pat­ing 6,900 wells would be drilled Canada wide, a drop from the 7,400 pre­dicted back in April. If their pre­dic­tion re­mains on track, Canada’s to­tal num­ber of wells drilled would be ap­prox­i­mately 200 less than in 2017.

PSAC’S fore­cast for Saskatchewan was ad­justed to 2,428, down from their pre­dic­tion of 2,931 back in April.

“While the num­ber of ac­tive drilling rigs is cur­rently up three to five per cent over last year de­pend­ing on the week, the rest of the oil­field ser­vices sec­tor is marginally busier than it was last year at this time,” PSAC Pres­i­dent and CEO Tom Whalen stated in the July 31 fore­cast. “When we look at the first half of ‘18 in ag­gre­gate, we drilled 200 less wells than in the first half of ‘17 but at the same time, the av­er­age length per well in­creased by ap­prox­i­mately 190 me­ters. In gen­eral terms, rev­enue num­bers for our sec­tor are up year over year but we note that sev­eral pub­licly traded Cana­dian ser­vice com­pa­nies are re­port­ing min­i­mal im­prove­ment in the qual­ity of bot­tom line earn­ings; many are sit­ting at near breakeven or are still in neg­a­tive territory. As we’ve said on pre­vi­ous oc­ca­sions, this is not sus­tain­able from a business con­ti­nu­ity and com­pet­i­tive­ness per­spec­tive. It’s also a com­pound­ing symp­tom of the sec­tor’s lack of at­trac­tive­ness for in­vest­ment.”

“Ob­tain­ing ac­cess to tide­wa­ter con­tin­ues to be mis­sion crit­i­cal for both our oil and gas weighted ex­plo­ration and pro­duc­tion cus­tomers and would mean an ad­di­tional $25 bil­lion for Canada.”

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