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More layoffs to come in drilling sector, as activity levels to remain low in 2016

The Canadian Association of Oilwell Drilling Contractors is warning the industry of more layoffs as the number of active rigs continues to fall in 2016.

CALGARY – Canada’s drilling industry is expected to post its worst year in more than three decades in 2016 with more layoffs and a record number of idled rigs.

“We are predicting one of the lowest utilization rates of our equipment since we started collecting this information in 1977,” Canadian Association of Oilwell Drilling Contractors president Mark Scholz said Wednesday.

Scholz said that drilling activity next year would be “the worst in a generation” with an average of only 159 rigs working, out of a total fleet of 722. He said the last time there was an average that low was in 1983, when the total fleet numbered about 450. That would make next year’s utilization rate the worst on record.

In its 2016 forecast, the CAODC estimated a total of 4,728 oil and gas wells will be drilled, a 14 per cent drop from the 5,531 wells expected to be drilled by the end of 2015.

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