The effects of low oil prices on Western Canada's upstream oil industry continues to show up in sagging yearend statistics for activity in 1998.
Sales of drilling rights in Alberta, British Columbia, and Saskatchewan totaled about $748 million (Canadian) in 1998 compared with $1.302 billion in 1997.
Crown land sales in Alberta totaled $596.9 million compared with $1.151 billion in 1997.
The decline in land sales is expected to continue this year, unless there is a significant improvement in oil prices.
The Canadian Association of Petroleum Landmen (CAPL) estimates that land sales in Western Canada will fall a further 20% in 1999, and the price per acre will drop 10%. Average Alberta land prices fell 12% in 1998 from 1997, to about $489/acre.
CAPL Pres. Ted Lefebre says there isn't much cash available to companies. He said the knee-jerk reaction of companies is to reduce buying at land sales, but that hurts a year down the road, when they do not have inventory to work with.
The Daily Oil Bulletin tallied 11,955 drilling licenses that were issued in Canada in 1998, down 43% from a 1997 record total of 21,115.
Development drilling licenses fell by 50%, while exploration licenses dropped only 9%, as companies focused on natural gas prospects.
The Canadian Association of Oilwell Drilling Contractors said 62% of the Canadian rig fleet was working in the first week of January compared with 91% in the same week in 1998.
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