The Canadian Association of Energy Contractors (CAOEC) has released its 2025 State of the Industry Report and 2026 Forecast and is projecting steady activity over the next year, highlighting the sector’s growing importance to national energy security, job creation, and emerging resource development.According to the forecast, 5,709 wells are expected to be drilled in 2026 — a 2.9% increase from 2025.Key highlights of the report include that drilling rig operating days are projected to rise to 59,943, while service rig operating hours are expected to climb 3.2% to just over 1 million.The report also showed that each active drilling rig supports 21 direct and 226 indirect jobs — nearly 53,000 positions in 2026.Mark Scholz, President & CEO of CAOEC, said that on the service rig side, average working service rigs are expected to be 463 in Q4 2025, ending the year at 447 and accumulating approximately 1,005,000 operating hours.“The service rig fleet will see slightly higher activity than in 2024, with a 3% increase year over year,” he said.“For 2026, we expect average working service rigs at 458 — a 2% year-over-year increase — and operating hours climbing 3% to approximately 1,037,000.”.Enserva's oil and gas forecast shows lower investment, rising LNG demand for 2025-26.Service rigs support a further 38,000 direct and indirect jobs, bringing the combined workforce tied to drilling and service rig activity to roughly 85,000.“Our industry represents paycheques for roofs over our heads, hockey sticks in young hands, and dreams realized in communities across Western Canada, including rural, remote, and indigenous areas,” Scholz said.“These are not just statistics. These roles don't merely employ; they empower — anchoring families in rural heartlands, indigenous communities, and beyond, injecting vitality into Canada's economy, and reinforcing why the work of our members matters."It was also announced that CAOEC has partnered with Garrison Strategy to conduct a comprehensive employment impact assessment of drilling and service rig activity, which is aimed at quantifying the sector’s national economic impact.Scholz said the outlook for 2026 reflects a return to more stable commodity markets after a challenging second half of 2025, when a glut of natural gas in Western Canada and delays at the LNG Canada terminal sharply reduced drilling activity.“We live for new production. When you’re in a negative pricing environment, that is not an ideal place to be,” he told the media on Monday.“A lot of our members were busy in anticipation of LNG Canada coming online seamlessly — and that didn’t materialize.”Technical issues at the $15-billion LNG Canada facility slowed the expected ramp-up of exports, leading some gas producers to curtail output.Scholz said drilling activity dropped 15% year-over-year in the fourth quarter, before moderating to a 5% decline.He expects improvements in the second half of 2026 as LNG Canada resolves remaining startup issues.“Long term, this is a game-changer for the gas industry in Western Canada,” he said, noting that additional indigenous-led LNG proposals could also push total export capacity to five billion cubic feet per day in a 16-billion-cubic-foot market.“We do see continued strong demand for natural gas drilling,” Scholz said..Canada’s drilling looking up after pandemic.On the oil side, Scholz pointed to emerging production discipline among OPEC members and Middle Eastern producers, which he believes will help stabilize crude prices and support activity.The report also identifies helium as a developing opportunity for contractors, particularly in Saskatchewan. Scholz said the same rigs, crews, and technology used for oil and gas drilling are already being deployed for helium wells.“Our members are agnostic about what we drill for,” he said.“Helium is critical for everything from quantum computing to MRI technology to national defence. We’re going to drill those wells.”However, he said federal tax rules currently treat helium differently from other critical minerals, limiting investment.Scholz said CAOEC is working with the Helium Developers Association of Canada to change that.“We’re advocating for similar treatment to other resource industries so investment can flow and we can drill more helium,” he said.“We need pragmatic energy policies with governments working in tandem and aligned with industry to get this done. The resource[s] are there... No one is disputing the fact that Canada has an immense amount of energy resources and critical minerals underneath our feet, but what we need is governments working in partnership, and we need pragmatic policy to actually execute it.”
