Canadian oil and gas drilling is brisker than expected after work seasons in 2015 and 2016 that the Petroleum Services Association of Canada describes as “difficult to say the very least.”
Citing a strong first quarter, PSAC increased its outlook for 2017 drilling to 6,680 wells drilled (rigs released) from its November 2016 forecast of 4,175 wells.
The group based its updated forecast on prices of $52.52/bbl (US) for West Texas Intermediate crude and $3/Mcf (Can.) for AECO Hub natural gas. It assumed an average Canada-US exchange rate of $0.74.
From the November forecasts, PSAC increased its outlook for drilling in Alberta to 3,320 wells from 1,900 wells, in British Columbia to 449 from 280, and in Saskatchewan to 2,670 from 1,940.
Mark Salkeld, PSAC president and chief executive officer, said Canadian drilling continues to face two main pressures.
“Canada desperately needs pipelines actually built to move oil to tidewater, and secondly, Canada needs LNG train approvals,” he said.
Referring to the US, Salkeld added, “The days of relying on one customer purchasing our oil and gas at a discount must end.”
