Oil industry ‘pleasantly surprised’ as drilling up in Sask.

Saskatchewan’s fields may be dry, but the rigs are wet as the oil industry picks up speed in Saskatchewan.

A forecast from the Petroleum Services Association of Canada (PSAC) called for 2,794 wells to be drilled in the province – up 44 per cent from an earlier forecast of 1,940 wells.

“We were pleasantly surprised coming out of (the first quarter) with an increase in drilling activity and completion activity,” said Mark Salkeld, PSAC president and CEO.

He said they had expected maybe 200 rigs to be working in the first quarter, but the actual number came out closer to 300. He added that the second quarter of 2017 also outperformed PSAC’s forecast.

The success comes despite oil prices hanging around $45-$50 a barrel.

“Our customers are relatively comfortable with that, so they’re going ahead with some of these drilling programs,” Salkeld told Gormely.

However, Salkeld said the upturn hasn’t necessarily reached all parts of the oilpatch. He said the industry’s service side is still struggling with razor thin margins.

“It’s tight on the services side and it’ll take a year or two more before we get our margins back up, our rates back up to where we need them,” he said. “But we’re working, you know, and our customers are keeping us busy and – relatively speaking – we’re back to work.”

Salkeld said many companies are choosing drilling over the oilsands, as it offers a quicker return on investment.