PSAC ups well forecast by about five per cent

The Petroleum Services Association of Canada continues to revise upward its prediction for activity in the oilpatch this year.

The Petroleum Services Association of Canada continues to revise upward its prediction for activity in the oilpatch this year.

The trade association, which represents companies in the service, supply and manufacturing sectors of the upstream petroleum industry, said Thursday that it now expects 12,000 wells to be drilled this year. That’s up about five per cent over the 11,475 wells that PSAC was projecting in January and the 11,400 it was calling for in its original 2013 forecast last November.

The new tally would mark a nine per cent improvement over the 2012 count, when 11,025 wells were drilled.

“Drilling activity is keeping on a steady pace this year, and we anticipate another pick up in activity in Q3 and Q4,” said PSAC president and CEO Mark Salkeld, in a release. “Even with steady levels of activity this year, continued low gas prices and the impact of infrastructure bottlenecks that are squeezing access to new markets are certainly having an impact.”

PSAC’s latest forecast is based on average natural gas prices of C$3.40 per thousand cubic feet and West Texas intermediate crude oil prices of US$90 a barrel.

Alberta is expected to contribute 7,563 wells to the 2013 total, which is seven per cent more than the 7,045 that PSAC was estimating in its original forecast. Drilling in Saskatchewan is expected to reach 3,286, a three per cent increase on the initial estimate of 3,199; Manitoba’s total for 2013 is now expected to reach 670, down 11 per cent from the 750 PSAC was forecasting five months ago; and British Columbia’s well tally is projected to hit 457, up 19 per cent from the November figure of 385.

“Natural gas development in northeastern British Columbia realized a bit of an uptick in part due to (Malaysian energy firm Petronas’s takeover of Progress Energy Resources Corp. last December), as well as increased activity for oil resource development in the northeast, and we’ve adjusted our numbers to reflect that activity,” said Salkeld. “While at the same time, we are seeing increased activity in both Northern Alberta with exploratory and development wells around the oilsands in situ plays, and increased activity along the Pembina Cardium fairway, as well as for the Bakken and Banff-Exshaw formations in Southern Alberta.”