The association representing oil and gas service companies is predicting a 10 per cent fall from current depressed levels of drilling in Canada next year.
The Petroleum Services Association of Canada says it expects a total of 4,500 wells to be drilled in Canada in 2020, down from 5,000 wells this year and 6,950 in 2018.
The association had estimated a year ago that 6,600 wells would be drilled this year. It said 4,100 wells were drilled in 2016, when oil prices fell to as low as US$27 per barrel, compared with over 11,000 wells in 2014 and 5,400 in 2015.
PSAC CEO Gary Mar says the outlook for 2020 is worse than this year because producers are spending their cash on buying back their own shares, paying dividends and reducing debt rather than investing in growing production.
Mar says there’s little hope of an upside following the election of a federal Liberal minority government that will need the support of parties that are hostile to the oil and gas industry.
The association’s forecast shows fewer wells being drilled in all western Canadian oil and gas producing provinces and no change from modest drilling expectations in Eastern Canada.