PSAC re­leases up­ward re­vi­sion of drilling fore­cast

The Southwest Booster - - FRONT PAGE -

The Pe­tro­leum Ser­vices As­so­ci­a­tion of Canada has is­sued a new fore­cast call­ing for a busier year of drilling ac­tiv­ity.

PSAC’S lat­est up­date to their 2017 Cana­dian Drilling Ac­tiv­ity Fore­cast is an­tic­i­pat­ing 6,680 wells will be drilled this com­ing year, and in­crease of 2,505 wells from their pre­vi­ous fore­cast and a full 60 per cent in­crease from their orig­i­nal pro­jec­tion of 4,175 wells in Novem­ber 2016.

“Never un­der-es­ti­mate the tenac­ity or ef­fi­ciency of the Cana­dian oil­field ser­vices sec­tor,” PSAC Pres­i­dent and CEO Mark Salkeld stated when re­veal­ing the lat­est drilling fore­cast to­tals. “The drilling sea­sons of 2015 and 2016 were dif­fi­cult to say the very least and the sec­tor is still mak­ing ad­just­ments to man­age costs and meet grow­ing ex­pec­ta­tions of their cus­tomers, but with some de­gree of con­fi­dence in $50 oil and the dra­matic low­er­ing of costs by the ser­vice sec­tor, we are see­ing in­creased ac­tiv­ity lev­els.”

Saskatchew­an’s fore­cast im­proved to a new to­tal of 2,670 wells, a 730 well im­prove­ment from the 1,940 wells in PSAC’S orig­i­nal fore­cast.

This new fore­cast is in align­ment with Saskatchew­an’s height­ened drilling ac­tiv­ity for the first three months of 2017, with 858 wells al­ready drilled. The 2017 cal­en­dar year to­tal has al­ready dou­bled the first three month to­tal of 399 recorded at the start of 2016.

“Af­ter an ex­tended pe­riod of cost man­age­ment and re­duc­tions, this in­dus­try is show­ing us once again the kind of re­siliency and ef­fi­ciency that makes it one of our most dy­namic eco­nomic sec­tors and a ma­jor con­trib­u­tor to Saskatchew­an’s eco­nomic growth,” En­ergy and Re­sources Min­is­ter Dustin Dun­can stated in a press re­lease. “This an­nounce­ment is a clear sign of re­newed op­er­a­tions in Saskatchew­an, in part be­cause of our province’s sta­ble and com­pet­i­tive op­er­at­ing en­vi­ron­ment.”

A big­ger jump is fore­cast for neigh­bour­ing Al­berta, with PSAC now es­ti­mat­ing 3,320 wells will be drilled in Al­berta, up from 1,900 wells in the their ini­tial fore­cast. Drilling to­tals in Bri­tish Columbia are now fore­cast at 449 wells, up from an ini­tial es­ti­mate of 280. Man­i­toba’s fore­cast went up to 221 wells, a slight in­crease from a quiet ini­tial fore­cast of only 50 wells.

“The pro­duc­ers are rec­og­niz­ing that the cost re­duc­tions de­liv­ered by the ser­vice sec­tor over the last three years are not sus­tain­able, espe­cially now that there are indi­ca­tions of an uptick in in­dus­try,” Salkeld stated. “The lead­ing edge in­no­va­tion, safety and ef­fi­cien­cies for drilling and com­plet­ing oil and gas wells in Canada come from mod­ern cer­ti­fied equip­ment and highly trained work­ers which are dif­fi­cult to de­liver with ra­zor thin mar­gins. Rate in­creases for oil­field ser­vices are be­ing re­al­ized slowly which will help this sec­tor get back to work de­liv­er­ing the best in class ser­vices our cus­tomers, the pro­duc­ers, need and rely on.”

“Two pres­sures on our sec­tor re­main in that Canada des­per­ately needs pipe­lines ac­tu­ally built to move oil to tide­wa­ter, and se­condly, Canada needs LNG train ap­provals. We are among the best in the world at get­ting oil and gas out of the ground for do­mes­tic use across Canada and so it also makes sense to pro­vide our re­spon­si­bly de­vel­oped Cana­dian oil and gas to parts of the world that want and need oil and nat­u­ral gas. The days of re­ly­ing on one cus­tomer pur­chas­ing our oil and gas at a dis­count must end. The sooner we ex­pand our cus­tomer base the bet­ter off Canada and all of its cit­i­zens will be,” says Salkeld.

“The oil­field ser­vices sec­tor has proven once again that they are re­silient in tough times, be­cause they have to be in or­der to com­pete and sur­vive. We have seen some mem­ber com­pa­nies fail, but we have seen oth­ers grow, con­sol­i­date and ex­pand. There are cer­tainly fewer oil­field ser­vice com­pa­nies today than there were just few short years ago but those that re­main are the lead­ers that will con­tinue to suc­ceed in this sec­tor go­ing for­ward.”

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