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Drilling activity shows optimism |
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Written by Newswire
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The 2009 Canadian Drilling Activity Forecast third quarter update, released by the Petroleum Services Association of Canada (PSAC), forecasts a slight decline in Canadian drilling activity levels from earlier releases of the 2009 Forecast. The revised forecast for 2009 is a total of 9,500 wells drilled (rig released) across Canada, down just slightly from the 10,000 wells forecasted in the April release.
The number is more optimistic than other industry forecasts due to a special update that PSAC commissioned of its annual Well Cost Study that shows service costs have decreased. Combined with the Alberta royalty credit and new well-incentive programs, this bodes for somewhat better drilling economics, according to the PSAC.
The PSAC Well Cost Study, typically released in November (Winter) and updated in April (Summer), was updated recently as an adjunct to the PSAC's Canadian Drilling Activity Forecast, in light of the impact that a major industry downturn has had on the services sector.
"Our Well Cost Study indicates a reduction of well costs in Alberta averaging 13 percent. The decreases range from a low of eight percent to a high of 17 percent, based on the region of activity," says PSAC president, Roger Soucy. "The largest percentage decrease came from steel casing and tubing along with drilling rig and fuel charges.
"We believe the decrease in costs will be enough to sustain a certain degree of activity, even in the face of continuing low natural gas prices. Unfortunately though, the decrease isn't enough to offset a further slide in activity over what was predicted earlier this year, with PSAC now forecasting a near 45 percent decrease over drilling activity levels in 2008."
On a provincial basis for 2009, PSAC estimates 6,265 wells drilled in Alberta, which is a 46 percent decrease from 2008 drilling levels. BC will see an 18 percent decrease to 690 wells, and Saskatchewan will see a 45 percent decrease to 2,275 wells.
www.psac.ca
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