Energy producers grappling with months of low crude prices are expected to halve drilling in Canada this year.
The number of oil and natural gas wells forecast to be drilled this year will plunge to 5,320 from 10,830 in 2014, the Calgary-based Petroleum Services Association of Canada, which represents drillers and fracking companies, said in a statement today. The organization reduced its forecast for 2015 activity by 47 percent from an October assumption.
Producers including Suncor Energy Inc. and Cenovus Energy Inc. have cut jobs, shelved projects and lowered drilling budgets after a glut of crude sent prices plunging last year. U.S. oil, which fell to its lowest in six years last month, is still down about 28 percent since the Canadian industry group released its initial forecast for 2015 activity.
“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,” Mark Salkeld, president of the services group, said in the statement. “When prices rebound, these companies will be more than ready -- no doubt about it.”