Ministry of Natural Gas Development has lowest year in more than three decades

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Barring a December sale surprise, this will be the worst calendar year for BC natural gas and petroleum rights sales in more than three decades.

This week’s November sale saw only six parcels sold — all leases which covered less than three thousand hectares — with an average per hectare selling price of $666.

That resulted in just over $1,768,000 in bonus bids, and left the year-to-date sales total at just over 14 million.

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The Ministry of Natural Gas Development shows the lowest calendar year total since 1978, at about $16.7 million, and it will take nearly double this month’s total in December just to match the annual post of 1982.

Now compared to last December’s sale that would seem like a slam dunk, as the bonus bids total in the final month of 2014 was $38.1 million.

However, this year the Natural Gas Ministry has posted only two monthly totals that exceeded $2 million —October’s 3.3 million, and January’s 2.2 million—but it also posted five months, which recorded less than 1 million each.

So that has left Finance Minister Mike de Jong looking at 2015 natural gas and petroleum rights sales revenue, that could be about $365 million less than last year, and with very little reason to be any more optimistic about next year.

That’s because the Wednesday sale numbers also came on the heels of another dismal well drilling activity forecast released on Tuesday, by the Petroleum Services Association of Canada.

For those who missed it, the P-SAC prediction was for the total number of wells drilled in the four western provinces next year — like this year — to be just over 5,000.

That represents a drop of more than 50% from the five year average of 11,670 beginning in 2010, with BC targeted for the biggest 2015 to 2016, year-over-year drop of 28%.


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