CAODC drilling forecast picking up, but that may be because it couldn’t have gotten much worse

CAODC president Mark Scholz. Image: JWN

The Canadian Association of Oilwell Drilling Contractors (CAODC) is expecting an uptick in drilling activity in 2017, but don’t take that as a sign that the group is encouraged about the prospects for the industry as it stands today.

“After record low utilization rates in 2016, it would be difficult to suggest 2017 could be anything but better,” the CAODC said in a statement, citing weak commodity prices and “abnormal” political and social factors.

“While the price of WTI is projected to stabilize somewhat, continued uncertainty surrounding pipeline infrastructure, and a looming price on carbon, continue to push Canada to the back of the line with respect to long-term investment.”

The CAODC is forecasting that 4,665 wells will be drilled in Canada in 2017, up from 3,562 in 2016. Drilling in Saskatchewan is anticipated to lead recovery efforts.

The rig fleet is expected to continue dropping, down to 610 rigs in 2017 from 665 in 2016. That’s down from 758 rigs in 2015.

“We are expecting a four per cent increase in rig utilization with a rig fleet that continues to decrease. Activity is moving in the right direction, but we’re still in a depressed and desperate economic environment,” CAODC president Mark Scholz said in a statement.

Scholz and the CAODC “continue to urge our governments at both the provincial and federal level to consider the impact of a carbon tax and lack of pipelines on the people and families in our industry. Canadians expect their government to attract jobs and investment during difficult economic times, not push them away.”