CALGARY - Sales of Crown drilling rights in Alberta have fallen to their lowest levels in 39 years.
Statistics posted on the Alberta Energy website this week, following the last auction of 2016, show that oil and gas producers paid $137 million this year for the right to drill oil and gas wells on land where the province owns the mineral rights.
That's the poorest showing since the province adopted its current auction system back in 1977 and worse than the previous low of $149 million in 1992. The average price paid per hectare in 2016 was $146.
Five years ago, in 2011, the province had its most lucrative year ever, racking up $3.5 billion from drilling rights auctions at which bidders paid an average of $860 per hectare while trying to nail down positions in the attractive Montney and Duvernay formations.
Oilfield services analyst Aaron MacNeil of AltaCorp Capital Inc. said companies in Alberta haven't been bidding because most have more land in inventory than they can afford to develop given current lower commodity prices.
In its budget last spring, the Alberta government estimated it would collect revenue of just $95 million from land sales in the 2016-17 fiscal year ending next March, rising to $157 million the following year.