Stronger-than-expected drilling activity in the second quarter has prompted the Petroleum Services Association of Canada to improve its outlook for 2011.
The trade association, which represents companies in the upstream petroleum sector, announced on Wednesday that it is now projecting that 13,325 wells will be drilled in Canada this year. This marks the latest in a series of upward adjustments to PSAC’s 2011 forecast — from 12,950 in April, 12,750 in January and 12,250 last November.
A news release issued by the association said 176 more rigs were released from completed wells in the April-to-June period than was anticipated, despite severe wet weather in parts of Saskatchewan and Manitoba. Many rigs were diverted to other areas as a result, it said.
“Despite tough weather conditions and a prolonged breakup, the services sector continues to meet the need to shift to other operating areas, ensuring drilling activity is staying on course so that efficiency and productivity goals are being met,” said PSAC president Mark Salkeld.
PSAC’s latest forecast is based on commodity prices of US$99 a barrel for West Texas intermediate crude and C$3.75 per thousand cubic feet for natural gas. If the new count proves accurate, it would represent a 10 per cent increase over 2010, when 12,158 wells were completed, and a 60 per cent jump from 2009, when 8,350 wells were drilled.
On a provincial basis, PSAC is anticipating that 8,761 wells will be drilled in Alberta, up eight per cent from 2010. Saskatchewan is expected to add 3,273, an increase of 17 per cent; British Columbia is projected to drill 660, a two per cent improvement, and Manitoba is forecast to hit 590, up 14 per cent from 2010.
“All signs going forward indicate a continuing positive outlook for the services sector, given new technologies, innovations and efficiency gains that accompany strong oil prices,” said Salkeld.
PSAC has more than 255 member companies operating in the service, supply and manufacturing sectors.