TVS: Gas drillers expecting modest recovery in 2010
Natural gas exploration activity will increase 22 per cent this year in British Columbia compared to 2009, an industry group predicts.
The Petroleum Services Industry of Canada said in a third-quarter forecast that well completions across the country in 2010 will increase 35 per cent compared to 2009, but remain nearly 50 per cent below record activity levels earlier in the decade.
Nationally, PSAC predicts 11,250 wells will be drilled by the end of this year compared with 8,350 in 2009.
PSAC expects B.C. will see 700 wells drilled, a 22-per-cent increase compared to 2008, by year's end. That's still well below a peak of 1,100 in 2006.
The industry group is basing its predictions on an average North American gas price of $4.50 Cdn per thousand cubic feet and an oil price of $78.50 US per barrel -- and said those comparatively low valuations will continue to forestall a robust recovery of the industry.
"While there is optimism that the global economy is recovering, uncertainty continues to hang in the air as negative economic indicators in the U.S. and abroad persist," PSAC said Tuesday in a news release.
"Oil prices continue to to maintain levels sufficient to provide a reasonable rate of return on investment, however, gas prices continue to languish, making most conventional plays uneconomic, offsetting any upside gains from oil drilling activity for the remainder of this year."
PSAC president Roger Soucy said a recovery will be made more difficult by the challenge of finding skilled labour "for those companies fortunate enough to be busy."
"Companies forced to shed valuable employees last year are now scrambling to hire them back or find replacements."
