Strong drilling forecast for 2013

The Petroleum Services Association of Canada is expecting a strong second half in the oilpatch next year.

The Petroleum Services Association of Canada is expecting a strong second half in the oilpatch next year.

The national trade association, which represents the service, supply and manufacturing sectors of the upstream petroleum industry, announced on Tuesday that it’s forecasting the completion of 11,400 wells in Canada during 2013. That would amount to a one per cent increase over the 11,250 wells the association expects to be drilled this year.

Mark Salkeld, president and CEO of PSAC, said his organization anticipates a quick start to 2013, followed by the typical slowdown during spring break-up.

“However, we expect the last two quarters of 2013 to bring increased activity as larger producers continue with their plans and mid-sized companies gain access to the capital they need,” said Salkeld.

PSAC’s forecast for 2013 includes 7,045 wells in Alberta, which would represent a three per cent increase over 2012. Drilling in Saskatchewan is expected to decrease by one per cent, to 3,199 wells; while Manitoba’s tally is projected to jump five per cent, to 750; and wells in British Columbia are anticipated to decline by 11 per cent, to 385.

The differences between the provinces reflects the type of hydrocarbon resources they have at hand.

“We are forecasting that 2013 will see nearly 90 per cent of well completions in favour of oil, which is being driven by commodity prices,” said Salkeld.

“As a result of ongoing suppressed gas prices, our forecast is conservative for next year’s activity levels.”

PSAC’s 2013 forecast is based on an average natural gas price of C$3.25/mcf (AECO) and an average crude oil price of US$95 a barrel (WTI).

Salkeld pointed to the higher cost of drilling deeper and longer wells, and the availability of capital for equipment upgrading and purchasing, as other factors that could impact drilling activity in 2013.

PSAC has more than 250 member companies, with these employing more than 65,000 people.