CALGARY -- A pair of forecasts released Thursday see little in the way of good news for Canada's ailing oil and gas sector.

The Petroleum Services Association of Canada predicts drilling activity will be 36 per cent lower than what it anticipated just six months ago, with only 3,315 wells drilled in 2016. It's the second time the forecast has been revised downward since November.

In 2014, before the oil price collapse hit full force, more than 11,000 wells were drilled.

PSAC CEO Mark Salkeld called the situation "dire" and said conditions are the worst he's seen in his 35-year career.

"We're sitting under a cloud right now," he said.

The PSAC had 265 members going into the Great Recession eight years ago and now it's down to 175 as the tough times force companies to merge, gobble up smaller competitors or even close their doors.

The employee count across the PSAC's membership has been slashed by about half, Salkeld said.

"We're talking tens of thousands of people unemployed with no end in sight, no indicators that we're going to come out of this any time soon."

PSAC officials met with the federal environment and natural resources ministers earlier this week to push for pipeline approvals and for infrastructure money to speed the cleanup of inactive oil wells. There were no promises, but Salkeld said the discussions were positive.

Meanwhile, a new report from the Conference Board of Canada says the country's oil and gas industry is expected to be in the red for the second year in a row.

But the pre-tax losses for 2016 aren't expected to be as severe as last year and the sector is on track to return to profitability in 2017.

The Ottawa-based economic think-tank predicts Canadian oil producers will collectively lose more than $3 billion this year, an improvement from last year's record $7-billion loss.

The price of West Texas Intermediate crude, the key U.S. benchmark, is projected to rise from US$39 a barrel this year to around $65 a barrel in 2020.

The natural gas extraction industry is expected to incur losses of $1 billion this year, slightly better than the $1.1 billion hole last year.

In 2017, the Conference Board sees oil producers turning a profit of $809 million and gas producers eking out $172 million in earnings.