CALGARY, AB: The Canadian Association of Oilwell Drilling Contractors (CAODC) issued an updated drilling activity forecast today reflecting the significant changes in commodity prices since the summer of 2014. CAODC is forecasting that the depressed price of oil and natural gas will adversely affect the number of active drilling rigs in service, resulting in an industry-wide slowdown and employment losses.
CAODC issued its original 2015 drilling activity forecast on November 20, 2014 with an assumption of oil (WTI) at $85.00/bbl (USD). The updated forecast uses an assumption of WTI at $55.00/bbl (USD)
The number of active drilling rigs in service is expected to decline from an average of 370 per day in 2014 to 203 in 2015 (-41 per cent). Fleet utilization is also expected to drop from 46 per cent in 2014 to 26 per cent in 2015.
“The new reality of $55 oil means that the entire industry will hurt for a period, and drillers and service rig contractors are not immune to that,” said CAODC President, Mark Scholz. “We have been through rough patches before and come out strong on the other end, and I’m confident that we will do that again, but right now, that’s going to involve buckling in.”
CAODC also projects that decreased drilling activity will hurt employment in the oil patch, resulting in the potential loss of approximately 3,400 direct jobs and up to 19,500 indirect jobs relative to 2014. Total net job losses (direct and indirect) could reach as high as 23,000 compared to last year.
“Times like this are tough not just on contractors, but on their employees as well. If there are not as many drilling rigs working, there will not be as many rig workers on the job. This will have significant adverse effects on indirect employment throughout the economy, well beyond just rig workers.”
The Canadian Association of Oilwell Drilling Contractors (CAODC) represents Canada’s drilling and service rig industry.
For more information contact:
Canadian Association of Oilwell Drilling Contractors (CAODC)
403-264-4311 x 113