BUSINESS

Drilling group updates drilling forecast with 'astounding' drop in activity

04/30/2015 04:11 EDT | Updated 08/08/2015 11:59 EDT
CALGARY - A drilling industry group is slashing its forecast for the number of wells that will be drilled in Canada this year by nearly half.

The Petroleum Services Association of Canada is calling for only 5,320 wells across the country in 2015.

The group says that's an "astounding" 47 per cent drop from what it predicted in October.

The forecast is based on an average natural gas price of C$2.50, crude prices of US$53 a barrel and the Canadian dollar at 77 U.S. cents.

The well count is expected to drop sharply in Alberta, Saskatchewan and Manitoba, but rise a little bit in British Columbia

Association president Mark Salkeld says the drop isn't surprising given that crude averaged just $47.83 a barrel in March, down from $84.40 in October.

"The interesting outcome from this downturn will be the innovative actions taken by companies to lower costs and create efficiencies that will better position Canada in the world of energy services, extraction and production," said Salkeld.

"When prices rebound, these companies will be more than ready — no doubt about it."