Oil and gas land sales down

The totals are in: 2015 was the worst year for oil and gas land sales in a generation.

The province auctioned off $4.2 million in drilling rights at its Dec. 9 land sale, bringing the 2015 total to $18 million.

Land sale totals haven’t been that low since 1982—the days of the National Energy Program. Investors bought just $17 million in drilling rights that year.

The sale is seen as an indicator of future oil and gas exploration, and land sales typically account for 30 to 70 per cent of the province’s oil and gas revenue. The December 2014 sale brought in $38 million, capping the year at $382 million.

The collapse in the price of oil, anemic North American natural gas prices and uncertainty around LNG have made for a rough year in the B.C. oilpatch.

Bill Gwozd, an energy analyst with HSB Solomon Associates, said exploration will likely be down for the foreseeable future.

“(Companies have) defocused on the exploration aspect and are taking the existing land and trying to harvest what they’ve got, instead of going to get something new,” he said.

Well completions in B.C. were down around a quarter this year, Gwozd said.

“Only around seven per cent of those are exploration (wells), the other 93 per cent are development,” he said.

“Ninety-three per cent of their activity is on land they already had.”

In all, the province leased 62,197 hectares for drilling this year, the first time an annual total has dropped below six-digits.