The Petroleum Services Association of Canada says it forecasts less well activity in both Alberta as well as the country on the whole. In a release at the end of April, the group says it now predicts 3,100 wells will be drilled in 2020, down around 1400 from their original forecast made in October of last year.
The basis for the change is said to be the low price of both natural gas and crude oil along with the exchange rate between American and Canadian dollars.
“Punishing blows continue to batter the health of this vital industry,” says PSAC Interim President & CEO Elizabeth Aquin.
“While 2020 began on a positive note, eroding investor confidence from protests and blockades of the Coastal GasLink Pipeline, cancellation of Teck’s Frontier Oil Sands project, and withdrawal of investment in the Énergie Saguenay LNG facility, began to cast a shadow on the promising start. What followed with the demand destruction from measures to combat COVID-19 compounded by a collapse in prices from a poorly-timed Russia-Saudi price war, quickly dashed any optimism for the rest of the year. The result is over $7 billion of capital investment cancelled from budgets to date, foretelling activity levels not seen in decades.”
Meanwhile, for Alberta, the group says about 1570 wells will be drilled, down around 27 percent from the original forecast. Compared to last year, the group says Canada will have about 37 percent less activity overall.