Low gas prices further drop forecasted drilling activity

In April, PSAC changed its forecast from 13,350 to 13,150 wells, which was already lower than the 15,100 predicted at the end of 2011.

The new forecast is based on average natural gas prices of $2.50/mcf Canadian and crude oil prices of $90 U.S. a barrel. Mark Salkeld, President of PSAC, explains that commodity prices have played a huge part in drilling activity this year, also factoring in the European debt crisis and decline in demand from Asia.

"We are cautiously optimistic about activity levels staying at or around the 2011 well count, with activity more weighted towards liquids rich gas and oil," adds Salkeld. "PSAC Member companies continue to be busy and the demand for their services in western Canada seems to have steadied following a late breakup and some persistent wet weather."

B.C. is forecasted to see the greatest decrease, down 22 per cent to 485 wells, while Manitoba is expected to have the greatest increase of 14 per cent.