Residents north of Cochrane living in the Lochend area can expect to see less drilling activity in 2015 and into the future compared to years past, according to the Lochend Industry Producers Group (LIPG).
The LIPG, which is made up of four oil and gas companies working in the Lochend area, indicated to the Eagle that the number of wells to be drilled this year ‘will likely be in the single digits.’ By comparison, in 2014 LIPG member companies drilled 27 wells.
“Falling oil prices have forced all energy companies to review their capital programs and adjust exploration and production plans accordingly,” said LIPG chairman Larry Stewart in a statement to the Eagle. “While the reduction in drilling activity is reflective of the current pricing environment, it also speaks to a natural decline in exploration activity as companies move toward a steady-state production phase of the Cardium development in Lochend.”
Though falling oil prices has affected operations in the Lochend area, Stewart said the LIPG had reached the ‘extent of the pool’ in the region and that drilling activity would decline, as they would now turn their attention to production operations of existing wells.
“This means that our neighbours will see less road traffic than in previous years and fewer active drilling sites,” said Stewart, adding that production sites typically only require a daily inspection by a single field operator and occasional maintenance.
As for potential layoffs due to the decline in oil prices, Stewart said they do not anticipate that field operations in the Lochend area would be negatively impacted, but that each of the four member companies would examine their capital programs going forward and make any staffing adjustments that may be necessary.
Several energy companies have announced layoffs since the drop in oil and gas prices began about a month ago, including Baker Hughes Inc. reportedly letting around 7,000 employees go and Suncor Energy Inc. cutting 1,000 jobs and $1 billion from its 2015 capital budget.
“While the current pricing environment will result in a decline in activity, our commitment to protection of the environment and safe operations remains firm,” Stewart stated.
Stewart said the LIPG has agreed to a year-long partnership supporting Cochrane events, such as WinterFest, SummerFest, the Labour Day Parade and Light Up, in addition to being a sponsor of the Labour Day Rodeo.
