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PSAC releases forecast and report

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The Petroleum Services Association of Canada (PSAC) released a pair of documents in late April. One examines drilling activity in western Canada, and the other looks at the horizontal drilling workforce.

In its second update to the 2014 Canadian Drilling Activity Forecast, PSAC calls for a slight increase in Canadian drilling activity for the year. The revised forecast for 2014 is 11,170 wells (rig releases), which represents an increase of 370 wells from PSAC’s original 2014 forecast, released in late October 2013.

The revised forecast represents an approximate one per cent increase over 2013 drilling levels.

PSAC is basing its updated 2014 forecast on average natural gas prices of $4.00 CDN per metric cubic foot, and crude oil prices of $95 per barrel US. The average exchange rate for the Canadian dollar is expected to be 90 cents US.

“With a longer winter than normal across Canada this year, and a breakup with continued activity in Q2 (the second quarter), drilling activity is keeping on par with our original forecast in October,” said PSAC president and CEO Mark Salkeld.

“Activity remains steady for our member companies, and many companies have been facing challenges with meeting demand, as the shortage of skilled labour continues.”

On a provincial basis, PSAC's projected 2014 well count for Saskatchewan has been increased by 11 per cent from 3,196 to 3,652 wells. Manitoba is now forecasted to drill 45 fewer wells, at 435 for the year, representing a nine per cent drop.

A total of 6,530 wells are to be drilled in Alberta, representing less than a one per cent decrease from the original forecast. British Columbia is expected to experience an increase in drilling levels from 550 to 623 wells, a 13 per cent jump.

The results of the PSAC-commissioned Horizontal Well Workforce Study have also been revealed. Conducted by MNP LLP, it is the first study of its kind, as it captures direct and indirect support for field employment on drilling and completion activity of new generation resource play wells, which employ horizontal drilling and multistage hydraulic fracturing.

The study included four main supplier groups – location, drilling, completion and logistics – required by typical wells that are completed in northeast British Columbia, central Alberta, and southern Saskatchewan in 2013.

The study revealed that of the 6,128 wells examined, those wells created the equivalent of 61,331 jobs based on a typical 40-hour work week. Based on the well types considered in this study, the number of individuals employed on these three types of wells range from 239 to 302 per well.

“The numbers are staggering when you consider how many jobs industry activity generates,” said Salkeld. “We know that the use of directional drilling with hydraulic fracturing has been critical to accessing Canada’s vast resources, and now we have a much clearer idea of the workforce generated by these new generation plays.”

 


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