Prolonged oil industry slump leads to third cut in Canadian drilling forecast

Prolonged oil industry slump leads to third cut in Canadian drilling forecast

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 per cent 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 per cent in the second quarter compared to the same period of last year.

This report by The Canadian Press was first published July 29, 2020.

Companies in this story: (TSX:PD)

The Canadian Press

drilling forecast

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Lacombe resident creates labyrinth near Breton

Marsha Duggan encourages others to use their imagination

330 km walk for charity going through Bentley

Chris Sadleir, 45, is walking from Calgary to Edmonton to raise money for the Lung Association

School curriculum to focus on basics, says LaGrange

Minister Adriana LaGrange, MLA for Red Deer South, said it will ‘unleash student potential’

1 in 7 Albertans have been tested for COVID-19

56 additional cases Thursday, 1,107 active cases remain in the province

Masks now mandatory in schools for Grades 4-12, staff

Students, teachers and staff will be provided with two reusable masks to be worn in schools

Protestors for Indigenous Lives Matter gather in Wetaskiwin

Protestors gathered along 56 St Wetaskiwin, Alta. August 4, 2020 for Indigenous Lives Matter.

Maskwacis teen charged in 10-year-old boy’s death

The RCMP Major Crimes Unit have laid a manslaughter charge against a 14-year-old boy from Maskwacis.

‘Caught up in the frenzy:’ Oilers 50/50 draw breaking ticket sale records

Previous record was held by Toronto Raptors fans when a 50/50 raffle reached $2 million

Alberta jury trials to resume next month at offsite locations due to COVID-19

About 12 locations across Alberta may host the trials in halls, hotels and community centres

Alberta school curriculum to focus on basics, keep out political bias: minister

NDP education critic says the kindergarten to Grade 4 changes should have been implemented a year ago

Statistics Canada says country gained 419,000 jobs in July

National unemployment rate was 10.9 per cent in July, down from the 12.3 per cent recorded in June

Canada plans $3.6 billion in retaliatory tariffs on U.S. in aluminium dispute

The new Canada-United States-Mexico Agreement that replaced NAFTA went into force on July 1

Walmart to make face masks mandatory for customers across Canada

Requirement goes into effect on Wednesday, Aug. 12 across Canada

Canada ‘profoundly concerned’ over China death sentence for citizen in drug case

Police later confiscated more than 120 kilograms of the drug from Xu Weihong’s home

Most Read