More gas and oil producers have embraced improving energy prices by increasing drilling programs. According to a new forecast, this aggressive action by producers will see drilling improve faster than was initially predicted. According to Canada’s Petroleum Services Association, about 5,200 oil wells will be drilled in the country. This figure surpasses the association’s November, 2016 prediction by about 975 wells.
Alberta is expected to be the most active in the industry, contributing about 2,700 oil wells out of the total wells to be drilled in Canada this year. According to the association, this will be a 40% increase from the forecast made in November of about 1,900 wells.
According to the CEO of the association, Mark Salkeld, many companies are currently rehiring. Frackers, drillers and other service operators are experiencing challenges recruiting. This has been attributed to the fact that many workers who were laid off either left the industry or moved out of the province to seek more reliable jobs. This is also good news for those who’ve been unemployed.
Oil and gas producers, where Genesis focuses its business, are increasing their budgets while service companies are recalling more people to work. According to Salkeld, “Companies running hydraulic fracturing processes haven’t just booked several contracts that will last months, but they have also started training schools which are currently accepting new recruits.” He goes on to state that, “We’re satisfied with what we currently have and looking forward to oil coming down through the pipes.”
Despite the improved energy prices oil producers are currently enjoying, they continue to keep their expenses, such as drilling and other related service rates, low to maximize profits. Oil field service companies can look forward to better rates in the future. The industry is expected to experience a balanced energy supply as oil prices improve.
Salkeld states that, “Producers are toiling to generate revenue within their margins as service companies are experiencing steady growth in terms of prices.” As Alberta celebrated its first anniversary since adopting the revised oil and gas royalties recommended by the NDP government-formed expert panel, the province has witnessed an increase in activity in the industry.
The CEO of ATB Financial, Dave Mowat, who chaired the expert review panel, said “What we need to do now to support the industry is to get people to work, recall workers who had been laid off and find innovative techniques of reducing costs.”
Our client service team are ready to help you today.