Drilling forecast cut by 500 wells on lower spending by Canadian producers

CALGARY — The Petroleum Services Association of Canada is slashing its 2018 drilling forecast to 7,400 oil and gas wells, down from 7,900 it predicted in its last forecast in October, but still ahead of the 7,094 actually drilled in 2017.

The group representing companies that provide services to oil and gas producers says the lower expectation comes as some of its members are cutting staff to deal with the shortage of work.

PSAC CEO Tom Whalen says higher prices paid recently for New York-traded West Texas Intermediate oil are welcome but lower prices for western Canadian oil due to insufficient pipeline takeaway capacity means Canadian producers don’t have as much money as their American rivals to spend on exploration and development wells.

He says a preference by customers to drill oil wells instead of gas wells due to worse prospects for gas pricing has resulted in its B.C. drilling forecast falling by 110 wells, a reduction of about $850 million in capital spending by the industry in that province.

He says Saskatchewan, which is more prone to producing oil, is expected to see over 300 more wells drilled this year than in 2017 at a cost of about $400 million.

PSAC’s updated forecast assumes an average Alberta natural gas price of C$1.75 per thousand cubic feet and a WTI crude oil price of US$61.45 per barrel this year.

“It’s shameful that we continue to sell our oil to the U.S. at a steep discount to WTI, short-changing Canadians over $15 billion per year,” said Whalen in a news release.

“The sooner we expand our customer base, the better off Canadians and, quite frankly, the rest of the world will be.”

Just Posted

Life and death: Mistake sent one family to funeral home, the other to hospital

Doctors told Jody Littlewolf that her daughter was brain dead and should… Continue reading

‘Still beautiful:’ Waterton Lakes National Park prepares for life after fire

WATERTON, Alta. — Parks Canada officials and businesses in Waterton say there… Continue reading

British royal family thanks those who celebrated wedding

LONDON — The royal family, blessed with fantastic weather and a buoyant… Continue reading

Cougar kills 1 mountain biker, injures 2nd near Seattle

NORTH BEND, Wash. — Two friends on a morning mountain bike ride… Continue reading

Red Deer’s indoor trampoline park announces closure

Citing mounting costs, Red Deer’s indoor trampoline park recently announced it was… Continue reading

Red Deer Silhouettes prepare for year-end show

Synchronized swimming team will perform its last show this season May 30

‘Like a warzone:’ People evacuated as fires burn through Manitoba city’s downtown

BRANDON, Man. — Leanne Marlow saw the flames engulf the building across… Continue reading

Canadians celebrate mix of pageantry, modern twists in royal wedding

As the freshly minted Duke and Duchess of Sussex embark on married… Continue reading

Maduro favoured as Venezuelans vote amid crisis

CARACAS, Venezuela — Venezuelan President Nicolas Maduro is expected to win a… Continue reading

Family, friends recall shooting victims’ optimism, humour

SANTA FE, Texas — Hardworking. Funny. Loving. Grieving family and friends recalled… Continue reading

Record Everest climber returns, already planning next trip

KATHMANDU, Nepal — A veteran Sherpa guide who scaled Mount Everest for… Continue reading

WATCH: First Red Deer Market of the year

Hundreds came out to the first farmers market of 2018 Saturday

Canadian families among throngs of royal fans camping out for glimpse of newlyweds

WINDSOR, United Kingdom — Intense security measures, massive crowds, jet lag and… Continue reading

Swiss stun Canada, Sweden crushes US in ice hockey semis

COPENHAGEN — Switzerland stunned title favourite Canada 3-2 to reach only its… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month