Southeastern Saskatchewan can expect the same drop in drilling activity that many other areas of western Canada will see in 2004.

In the southeast, about 400 wells in total are projected for 2004, down from 512 wells in 2003, according to Debra McAdam, manager of communications for the Petroleum Services Association of Canada (PSAC), on Friday.

Of that total for this region, about 345 will be oil wells and five will be natural gas wells. The remainder will be dry and service wells, said McAdam.

In 2003, 439 oil wells were drilled, with three being natural gas and the remainder either dry or service wells.

PSAC upgraded its fall estimate of drilling activity by five per cent at the end of January. The trade association estimates a total of 20,005 wells will be drilled in western Canada in 2004, up from 18,965 wells in its original October forecast, but down from the actual 2003 levels.

PSAC estimates a 2004 total well count of 14,790 wells in Alberta, 1,100 in B.C. and 3,900 in Saskatchewan. About 63 per cent of all wells drilled and 71 per cent of the net producing wells are expected to be natural gas wells.

Oil and gas exploration company capital expenditures in western Canada will drop by five per cent this year and prices will decline in the spring, predicts PSAC.