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Canada's oil field service companies expect an 8 percent jump in drilling next year, with oil targets in Saskatchewan and northeastern Alberta generating the bulk of activity.

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Weak natural gas prices will keep a lid on drilling elsewhere, however, the Petroleum Services Association of Canada said on Monday.

For 2011, PSAC sees 12,350 wells, up from an estimated 11,350 this year. The numbers foresee a 16 percent increase in Saskatchewan drilling and 5 percent in Alberta.

Activity in Saskatchewan is being driven by high interest in the Bakken unconventional oil play, where companies have had success drilling horizontal wells and fracturing rock, similar to shale gas operations.

Similar operations are heating up in Alberta's Pembina Cardium play.

The forecast is more optimistic than that of the Canadian Association of Oilwell Drilling Contractors, which said last week it expects drilling in Western Canada to increase 2 percent to 11,811 wells.

PSAC's forecast assumes benchmark U.S. oil will average $80 a barrel and Alberta spot natural gas will average C$4 per thousand cubic feet.

Source: Reuters

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