A key indicator of future oil and gas drilling activity in Alberta has fallen to a record low as pipeline capacity constraints continue to restrain oil patch spending.
This week’s auction of Crown drilling rights – which allow energy exploration on land where mineral rights are held by the province – raised just $3.9-million for the Alberta treasury, bringing the 12-month total to $119- million.
That’s less than the previous low mark of $137-million set in 2016 amid depressed global commodity prices and the lowest since the auction system was adopted in 1977.
The high was in 2011, when a bidding frenzy sparked by the Duvernay oil-bearing formation resulted in $3.5- billion spent on buying rights.
Auctions in British Columbia also posted a record low in 2019, with a total of $14.7-million invested, slightly below the $15.2-million in 2016 that was the previous low. The record high in B.C. was $2.66-billion in 2008.
In Saskatchewan, sales of drilling rights raised about $25-million in 2019, the lowest since 1992. The province’s record year was also 2008, when it raised $1.1-billion.
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