In its first update to the 2021 Canadian Oilfield Services Activity Forecast, released today, the Petroleum Services Association of Canada (PSAC) has revised the number of wells drilled (rig released) across Canada for 2021 to 3,350 wells. This is an increase of 750 wells which would be a considered a modest amount based on historical activity, but is 29 percent over PSAC’s original 2021 Forecast released in October 2020.
The updated forecast is based on a stronger commodity price outlook for the 2021 forecast with PSAC now expecting average crude oil prices 19 percent stronger at US$50.00/barrel (WTI), natural gas prices of $2.60 CDN/mcf (AECO) and the Canadian dollar slightly stronger averaging $0.79USD.
PSAC Interim President & CEO Elizabeth Aquin commented, “The strengthened commodity price outlook today versus what was expected back in October is welcome news for our members who provide the service, supply and manufacturing for energy development. As expected global economic recovery gradually restores demand, it is helping to improve cash flows and balance sheets for our members’ oil and gas customers. Recent announcements by Canadian oil and gas companies of their 2021 investment levels show an additional $3.36 billion to $27.3 billion. Although these levels are still lower than the $35.2 billion invested in 2019 and modest compared to the $81 billion spent in 2014, it is an encouraging sign for the oilfield services (OFS) sector that PSAC represents. The downturn and pandemic have taken a heavy toll on the sector. This boost to investment in new activity is welcome news that the exploration and production (E&P) companies still see potential and opportunity in Canada.”
Activity levels in the first half of 2021 are only expected to account for 47 percent of the year’s total versus 64 percent last year before the full impact of blockades, project cancellations, and COVID-19 was felt. We believe that the second half of 2021 will see increased activity year-over-year. The majority of drilling this year is expected to be focused on oil with 67 percent of total wells, and gas with 30 percent of total wells, with the balance being service wells.
On a provincial basis for 2021, PSAC estimates 1,632 wells to be drilled in Alberta and 1,189 wells for Saskatchewan, representing year-over-year increases of 184 and 111 wells, respectively. At 90 wells, drilling activity in Manitoba is expected to increase modestly from 83 wells in 2020, whilst activity in British Columbia is projected to increase from 367 wells in 2020 to 420 wells in 2021. At 19 wells for 2021, activity in Eastern Canada is expected to increase nominally from its 2020 figure of 16 wells.
Di-Corp’s drilling fluids supply team are ready to meet additional demand and support increased drilling activity in the WCSB. Contact us a full range of drilling fluids, additives, and knowledgeable advice.
*The above is an excerpt from PSAC’s media release. To read the full release click here. To purchase PSAC’s full forecast click here.
