CALGARY - Oil drilling activity will rebound slightly next year inCanada on sustained crude prices, with natural gas continuing to tumble,according to the latest prediction by an industry association.
Activity in the oilpatch is expected to climb eight per cent to12,250 wells next year with Saskatchewan experiencing the largestpercentage gain, according to the Petroleum Services Association in itsannual forecast Monday.
In 2010 a stronger economy and steady oil prices pulled up overalldrilling to an estimated 11,350 wells, a trend that's expected tocontinue.
"This past year has been a turnaround year for the industry," President Roger Soucy said in a statement.
"Although still a long way from the almost 25,000 wells of 2005, it represents a new beginning on a number of fronts."
Soucy, who retires from his position this month, said the associationis forecasting strong prices will see producers increase drillingactivity in oil-prone regions such as Saskatchewan and northeastAlberta.
"Gas pricing, on the other hand, remains relatively low and we arenot expecting any significant gas price turnaround in 2011," he said.
The association is forecasting natural gas prices will average $4 perthousand cubic feet in 2011, with oil prices coming in at $80 US perbarrel.
Alberta will continue to see the highest number of wells drilled, atan estimated 7,915 wells, or a five per cent increase, the associationsaid. However, activity centred around conventional natural gas isexpected to drop by 11 per cent in the core region of southeast Alberta.
Saskatchewan will experience the largest per cent jump in activity, climbing to 3,050 walls or a 16 per cent rise.
Activity levels in British Columbia will inch up one per cent to 700 wells, with Manitoba gaining 10 per cent to 550 wells.
Last week the Canadian Association of Oilwell Drilling Contractors said it expected 11,587 wells to be drilled this year.
The association took a slightly less optimistic view for 2011, predicting a two per cent increase to 11,811 wells.
Also last week, investment brokerage UBS forecast 13,000 oil and gaswells will be drilled in Canada in 2011, up from 11,600 predicted forthis year.
domeara@calgaryherald.com
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