Drilling group predicts slight uptick in Canadian activity next year

CALGARY – The head of an oil and gas drilling group is calling the Alberta-Ottawa energy accord a “game changer,” but says the benefits won’t filter through to industry members straight away. 

“This is really pragmatic policy. I think it’s competitive policy,” Mark Scholz, president and CEO of the Canadian Association of Energy Contractors, told reporters Monday. 

“And I think it’s a game changer for the for the conventional business.” 

Scholz made his remarks after CAOEC released its annual State of the Industry report, which calls for a slight uptick in activity next year in Canada. 

The group — which represents 89 land drilling, offshore drilling and service rig companies operating across Canada — is expecting  5,709 wells to be drilled next year, up about three per cent from this year. 

It predicts roughly the same percentage increase in drilling rig operating days and service rig operating hours next year. 

“The message is one of flat activity amid an evolving and volatile macro environment,” Scholz said. 

Another energy industry group, Enserva, released its outlook for the sector last week. Enserva represents energy services, supply and manufacturing companies. 

Enserva is predicting a 5.6 per cent drop in spending this year versus last, and a further 2.2 per cent decline in 2026. 

Scholz said natural gas prices are expected to improve next year as the LNG Canada export facility in Kitimat, B.C., ramps up production. 

“We also are hopeful that we’ll see much more discipline within the oil market. We have already heard discussions about production cuts with (the Organization of Petroleum Exporting Countries).” 

Though he was encouraged by the memorandum of understanding announced Thursday by Alberta Premier Danielle Smith and Prime Minister Mark Carney, Scholz said it is not expected to change next year’s forecast. 

The centrepiece of the MOU was the enabling of a potential new pipeline shipping at least a million barrels a day to the West Cost for export to Asia. But it also includes a host of other energy policy changes, including the scrapping of a planned federal emissions cap, an equivalency agreement on methane emissions cuts and the removal of some provisions in federal anti-greenwashing legislation. 

“I would say the anti-greenwashing piece is highly impactful in the short term,” Scholz said. 

“But the emissions cap as well as the more reasonable methane emissions — these are benefits that we’re going to see in the medium and long term.”

The Alberta government has committed $14 million to fund early work on preparing an application to the Major Projects Office in the spring, with the goal of derisking it enough to hand it off to the private sector.

Speaking to reporters following the CAOEC announcement Monday, Smith said nothing has come up so far that would suggest more provincial money will be needed for now.  

She said changes to federal environmental policies set out in the memorandum of understanding should give oil companies the confidence to grow their production and fill up a new pipeline. 

“Who is going to expand their production by 400,000 or a million barrels or more when we have an overlay of federal policy saying that you have to reach unattainable targets by 2030 or 2035 that would result in shutting in?” Smith asked. 

“So now we have a commitment from the federal government that we won’t have an emissions cap. We have a commitment that they will work with us to make sure it is the lowest emissions heavy barrel on the market. And we have a commitment to work together on the Pathways (carbon capture and storage) project so that we can decarbonize further.”

Before the Alberta government is in a position to formally gauge shipper interest in a pipeline — a process known as an “open season” — more work needs to be done on determining an exact route and end point for the line, Smith said. 

This report by The Canadian Press was first published Dec. 1, 2025.