Thursday, 03 November 2011 09:09

PSAC Forecasts 2012 to see increased oilpatch activity

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Courtesy PSAC

The 2012 Canadian Drilling Activity Forecast, released today by the Petroleum Services Association of Canada (PSAC), forecasts a total of 15,100 wells drilled (rig released) across Canada for 2012. This is 10% more than the expected final tally of 13,700 for 2011.

“Drilling activity levels are increasing,” said Mark Salkeld, president and CEO of PSAC. “Generally, activity continues to increase across all major activity areas, and we are optimistic that activity is going to continue to rise in the years ahead.”

On a provincial basis for 2012, PSAC estimates 9,255 wells to be drilled in Alberta and 640 in British Columbia, representing an increase of nine per cent in Alberta and an increase of four per cent in B.C. over expected 2011 drilling levels.

Saskatchewan’s drilling rate in 2012 will see a 15 per cent increase to 4,650 wells.

Drilling in Manitoba will see a one per cent increase to 525 wells.

“We all know that oil and gas activity is predicated on price,” continued Salkeld. “In 2012, oil prices will be adequate to sustain oil drilling related activity. As a result, we are forecasting an increase in drilling for oil in regions like central and southern Saskatchewan and northeast Alberta. Gas pricing, on the other hand, remains relatively low and we are not expecting any significant gas price turnaround in 2012. Thus we are expecting to see 80% of wells drilled in the basin be oil and liquids rich gas wells. This compares to an expected 74% of drilled wells being focused on oil in 2011.”

PSAC is basing its 2012 Forecast on average natural gas prices of CDN$3.50/mcf (AECO) and crude oil prices of US$85 barrel (WTI).

“We were being conservative in our forecast for 2012 because of restrained capacity due to labour and equipment shortages,” explains Salkeld. “Now more than ever, industry and government have got to come together to address the pressing issues constraining productivity and the labour issue is not going away. We are encouraged by Premier Redford’s attendance at our event this evening. It readily demonstrates the coming together of industry and government, and we are confident that the road ahead will be a positive one.”

The Petroleum Services Association of Canada is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry. PSAC represents a diverse range of over 250 member companies, employing more than 56,000 people and contracting almost exclusively to oil and gas exploration and production companies. PSAC member companies represent over 80 per cent of the business volume generated in the petroleum services industry.

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