Prolonged oil industry slump leads to third cut in Canadian drilling forecast

Prolonged oil industry slump leads to third cut in Canadian drilling forecast

CALGARY — The Petroleum Services Association of Canada is cutting its 2020 Canadian drilling forecast for a third time as the industry remains mired in a slump expected to extend well into the second half of the year.

The association says it now expects just 2,800 wells will be drilled in Canada this year, down from a nearly 50-year low of 3,100 in its revised forecast in April.

The new forecast for 2020 is 43 per cent lower than the 4,900 wells drilled in 2019.

PSAC interim CEO Elizabeth Aquin says a slow economic recovery, low commodity prices and high debt levels in the industry are preventing a quick recovery from the lows of earlier this year amid an economic downturn caused by the COVID-19 pandemic.

She says a North American crude oil supply surplus means producers have little incentive to explore for and develop new wells.

Last week, Calgary-based Precision Drilling Corp. reported more layoffs and parked drilling rigs as revenue, led by lower activity in its Canadian and U.S. operations, fell by 47 per cent in the second quarter compared to the same period of last year.

This report by The Canadian Press was first published July 29, 2020.

Companies in this story: (TSX:PD)

The Canadian Press

drilling forecast

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Anti-racism demonstration was not a ‘peaceful protest,’ as sides spar in Red Deer

Two groups that rallied in Red Deer on Sunday afternoon could only… Continue reading

Addressing anti-mask protests poses a challenge for leaders, experts say

Quebec’s COVID-19 case numbers hit their highest numbers since the end of May

Canada’s Kennedy to yesterday’s man: former PM John Turner dead at 91

Politicians and other public figures immediately began sharing memories

QUIZ: A celebration of apples

September is the start of the apple harvest

Five things to watch for in the Canadian business world in the coming week

The 2020 Global Business Forum in Banff, Alta., will be held as a special hybrid event

New tools, ideas needed to speed up housing strategy funding, CMHC president says

Slow turnaround time on some of its national housing strategy programs

Letter containing ricin sent to White House may have come from Canada: RCMP

The letter contained ricin, a toxic substance found naturally in castor beans

Nunavut reports first confirmed COVID-19 cases, saying both are mine workers

The territory says at this time, there is no evidence of transmission within site

B.C. migrant, undocumented workers rally for permanent residency program

The pandemic has shown how heavily Canada relies on migrant and undocumented workers

Wetaskiwin RCMP make arrests for Hit and Run to residence

Damage estimates are expected to be in excess of $20,000.

Former prime minister John Turner dead at 91

TORONTO — Former prime minister John Turner, whose odyssey from a “Liberal… Continue reading

Hay’s Daze: Happy to be left out of the picture

Talk about being out of the loop. Head in the sand. Uninformed,… Continue reading

Most Read