The organization that represents Canadian drilling contractors is forecasting a 14 per cent increase in the number of oil and gas wells to be drilled in Canada in 2021 compared with historic lows this year, but warns the outlook remains depressed.
The Canadian Association of Oilwell Drilling Contractors expects 3,771 wells to be drilled next year, up 475 from the projected total of 3,296 in 2020.
The forecast is more optimistic than one made three weeks ago by the Petroleum Services Association of Canada calling for a total of 2,600 wells next year, down 8.8 per cent from an expected 50-year-low total of 2,850 wells in the current year.
The two organizations use different methods to count wells.
“The prospects for an effective COVID-19 vaccine are promising, but the impact of the pandemic on energy demand in 2021 and access to capital for our members and their customers remain a challenge,” CAODC CEO Mark Scholz said.
“Although the industry’s short-term challenges endure, we continue to be bullish in the medium and long-term as the world continues to demand Canadian energy resources.”
The slightly improving conditions in the oilpatch suggest that more consolidation of producer and service companies will occur, said forecast committee chair Brian Krausert in a report.
The CAODC forecast for 2021 represents a 71 per cent drop from the 13,089 wells drilled in 2014, the year before the current oilfield slump began, CAODC noted.
It added that the estimated number of direct jobs on rigs has fallen to about 1,850 in 2021 from 7,160 in 2014.
Drilling rig operating days are expected to fall to 33,940 in 2021, down 74 per cent from about 131,000 in 2014.
The CAODC forecasts that the Canadian drilling fleet will shrink by 27 rigs in 2021 to 478 after remaining relatively stable in 2020. The fleet was at 623 rigs in early 2018.
It notes that CAODC drilling contractors had work for an average of only 17 rigs in June.