PSAC revises forecast for quieter drilling year

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.”