Canadian light oil producers will drill more wells than previously expected this year as the sector benefits from investors transferring capital out of the oil sands, the Petroleum Services Association of Canada said on Monday
In an update to its annual drilling forecast PSAC said 7,200 wells will be drilled this year, 8 percent higher than its prior estimate of 6,680 wells.
The industry body said it had underestimated how fast investors looking for a swifter return on capital in a low oil price environment would switch from long-term investments in the high-cost oil sands to short-cycle liquid rich natural gas and shale oil plays.
“One of the events that played out that was not well understood at the time of the original forecast was the relatively quick impact of the transfer of investment out of the oil sands into the conventional sector,” said PSAC chief executive Mark Salkeld. Read More…