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.
Ian McConnell, vice president of Core Laboratories oil well services company, says the industry is making cuts just to survive.
“The service industry, including Core Lab, has had one, two, three, four layers of layoffs, and now we are cutting into assets from a human standpoint that we really do not want to, but from a financial standpoint we have to do that,” McConnell told Global News.
“Is this survival mode? Yes, this is survival mode right now.”
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.
With files from Global’s Gary Bobrovitz
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