After turbulent times in the gas and oil industry during the economic downturn over the last three years, the energy industry in the Stettler region, and Alberta in general, appears to be rebounding with more activity expected in the next year.
Exploration and drilling activity is expected to rise as oil and gas land sales in Alberta have reached a high of $1.86 million this year, the highest level in in history, surpassing the previous record of $1.83 billion in 2005.
Although most of these sales are in northern Alberta and south of Lethbridge, energy companies in Stettler and east central parts of the province are reaping great benefits that are expected to grow more over the next few years.
“We are very excited for 2011,” said Rob Grandfield, chief operating officer of Strad Energy Services of Stettler, one of the fastest-growing energy companies in North America.
“This will be a record year for revenue for Strad and we expect 2011 will be better than 2010.”
Revenues have already exceeded $100 million after the first three quarters of the year, which will far exceed the revenue of $75 million for the entry year of 2009, he said.
While drilling activity in the local region is limited, many energy companies are back in full force.
With a staff of 100 alone in Stettler, Strad has increased staff in the last nine months to over 500, more than the staff of 450 before the downturn hit about three years ago.
“We laid off about 24 per cent of our staff and business was down 34 per cent,” said Grandfield.
“These land sales are a leading indicator of interest in investment in oil and gas activity,” said Don Herring, president of the Canadian Association of Oilwell Drillng Contractors.
While much of the sales are in the north and south, drilling activity has ramped up in east central Alberta, he said, with 35 drilling rigs out of 65 that are active, which is about 48 per cent.
“That’s pretty well the Alberta average,” said Herring, noting that the average last year was 26 per cent.
“Our forecast shows we are experiencing a strong year and we’re expecting much the same in 2001.”
Much of the activity will focus more on oil than gas.
The provincial government is also optimistic about the future.
“Alberta’s oil and gas industry has expressed renewed investment confidence through record lease and licence sales,” said Energy Minister Ron Liepert.
“Changes to the royalty structure encouraging the deployment of new technologies was a significant factor supporting larger-than-expected lease and licence sales,” he said.
“These sales mean new jobs and new opportunities for industry and that’s good news for Alberta, and for Albertans.”