While 2008 was a year of two extremes, with oil and gas producers experiencing boom and bust all within 12 month, they still continue to plan for the future according to the Canadian Energy Survey released Wednesday by PricewaterhouseCoopers (PwC) and JuneWarren-Nickle’s Energy Group.

Seventy per cent of respondents expect prices to increase somewhat over the next year and 11% believe prices will increase substantially. Approximately 16% said crude oil prices will stay about the same in the year ahead.

The majority of respondents said oil prices will have to increase to at least US$70-$80 before they would consider increasing conventional drilling programs, although an almost equal number said prices will have to head north of US$80 before spending more on conventional drilling.

Respondents also said they expect to increase their investment into research and development (R&D) over the next two years, with 23% indicating they plan to boost R&D spending in 2011 versus only 4% this year and 22% in 2010.

Seventy-two percent of gas producers believe prices should recover within the next two years to a level that will lead them to increase their drilling programs whereas 28% believed it might take three years or longer for natural gas prices to recover to levels that will result in more wells being spudded.

“The turbulent swing in energy prices from all-time highs in the summer of 2008 to four-year lows in December is a powerful reminder that the booms in commodities can quickly evaporate,” says John Williamson, partner and Canadian energy leader at PwC. “At the mid-way mark of 2009, while gas prices continue to languish, many believe natural gas fundamentals point to a recovery in 2010, which will lead to improved drilling activity levels. Crude oil prices have already rebounded from year-end 2008 levels.”

The 2009 Canadian Energy Survey contains results from an online survey, conducted by PricewaterhouseCoopers and JuneWarren-Nickle’s Energy Group during the 22-day period from May 25 to June 15, to better understand issues currently impacting the industry. Close to 85% of the 140 respondents fill senior roles within the energy sector (49% in a leadership role; 35% in a managerial role), with the balance comprising employees and consultants.

IE