Canadian well count forecast trimmed for 2012

Drilling activity across Canada will slide in 2012 as producers continue to turn away from cheap natural gas to drill for more lucrative oil, a trade association said.

The Petroleum Services Association of Canada lowered its annual drilling forecast, citing declining gas prices, labour shortages, an early spring breakup and producer caution in the face of global financial uncertainty.

Canada will see 13,150 wells drilled this year, down 200 wells from a November forecast, the association said in its second-quarter update.

The number is higher than the final tally of 12,850 wells drilled last year, and still strong given the advances in drilling technology, PSAC president Mark Salkeld said.

“We have to bear in mind that the days of 20,000-plus wells are likely not to return any time soon, and that’s largely due to the fact that we are drilling longer and more complex wells now that are accessing plays once thought unreachable or fully tapped,” Salkeld said in a statement.

British Columbia will be hardest hit by natural gas prices predicted to average below $2 per thousand cubic feet this year, with a five per- cent drop in drilling activity to 591 wells. Alberta will see a two percent decrease in wells to 7,949, while Saskatchewan and Manitoba will see 13 and six per cent increases, respectively, to 3,962 wells and 618 wells.