Drilling forecast predicts increased production in Alberta

The future of Alberta's oilpatch is looking a little brighter after an updated forecast on drilling activity.

ThePetroleum Services Association of Canadahas released numbers showing an increasein the number of wellsbeing drilled in Alberta this year.

MarkSalkeld,president and CEO of theassociation, said the increase is partially due to suppliers' confidence that oil will continue to hover aroundthe $45 to $50 mark.

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"Our members forecast around 200 rigs and planned accordingly, but we ended up having over 300 rigs working and all the completion work required to support that increased activity,"Salkeld told theCalgaryEyeopenerEarlier this year, the association expected 6,680 wellsto be drilledacross Canada for 2017.Its latest forecast pushed that number up to 7,200. Salkeldsaid keeping rigs staffed has been an ongoing challenge.

'A lot of people left'

After years of steady layoffs in the oilpatch, an increase in well production means a lack of labour.

Salkeldsaid service companies areactivelyrecruiting new talent but are having difficulty convincing former employees to return to the fold.

"Those folks that left, a lot of them are just not interested in coming back. We've put everyone that we could put back to work already,"Salkeldsaid. "Folks that have moved on with not enough confidence in the sector are happy where they're at, and we're struggling."

"A lot of people left. We felt this shutdown in 2014 the services side had to start laying off people because of the slowdown, and we're coming up on three years now," he said.

Salkeld saidthe longevity of rig workhas increased, andthetraditional feast-and-famine cycle for oilpatch workers has declined somewhat, thanks to new technologies in the industry and a longer completion process.

"But the wells that we're drilling now are longer, deeper longer to complete, and providing a longer job opportunity, and we'll continue to kind of develop that," Salkeld said.

Room for improvement

Salkeldsaid the situation in the province hasimproved with the new forecastbut there isno indication the industry is approaching"any kind of oilpatch boom cycle again."

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Even with a slightly sunnier outlook forthe remainder of the year,Salkeldsaid there is still work to be done to increase production.

Salkeldhopes the industry can stimulate growthbyimproving the relationship between service companies and suppliers.

"Canada is 15 to 20 years behind other parts in the world in their supply chain relationship," Salkeld said. "Basically, if we can get the cost down and help our customers succeedin turn we work, and it improves and helps with our members' margins."

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