Prolonged oil industry slump leads to third cut in Canadian drilling forecast
By CP STAFFGeneral Energy Oil & Gas Canada drilling oil and gas
The Petroleum Services Association of Canada says it now expects just 2,800 wells will be drilled in Canada this year
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% 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% in the second quarter compared to the same period of last year.
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