Record Canadian Oil, Gas Drilling Year Expected In 2006

CALGARY, Oct 27, 2005 (Dow Jones Commodities News Select via Comtex)

A record number of oil and gas wells will be drilled in 2006 in Canada and in Alberta, according to the Petroleum Services Association of Canada.

In its 2006 Canadian Drilling Activity Forecast, PSAC is expecting 25,290 wells to drilled across Canada, 20,000 of which will be in Alberta.

That's up 6% from the expected final tallies for Canada and Alberta in 2005. PSAC estimates that 23,890 wells will be drilled in Canada this year.

The increase will be the result of continued strong commodity prices and a growing emphasis on natural gas from coal, PSAC says.

"In 2006, we're expecting about 3,500 NGC wells, mostly in Alberta," Roger Soucy, President of PSAC, said. "Activity levels in the NGC areas of southeast and central Alberta will rise 6% to 7%."

PSAC is expecting both crude and natural gas prices to stay strong throughout the year. It's based its forecast on crude oil prices of US$60 a barrel for West Texas Intermediate, and natural gas prices of C$9.50 per million cubic feet.

The organization also estimates that 1,600 wells will be drilled in British Columbia in 2006 - a 20% increase on expected 2005 figures. Saskatchewan's drilling rate will remain flat, with 3,430 wells anticipated.

"Activity levels (in B.C.) have been climbing over the past few years. B.C. is becoming a very favorable location for oil and gas activity," Soucy said.

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