June petroleum and natural gas rights sale sees boost to $1.8M

It certainly doesn’t fall into the category of blockbuster news, but the results of the June sale of Crown petroleum and natural gas rights were a sizable improvement over the previous two months.

Twelve of the 15 parcels offered this week were purchased, resulting in a bonus bids total of $1.8 million.

That’s more than three and half times the combined total for the April and May sales, of only$485,000.

It leaves the total for the first half of 2015 at slightly less than$7 million, and less than eight per cent of the $90 million total for the same period last year.

In addition, it still leaves the government on pace to post its worst ever calendar year total in records dating back to 1978.

Generally speaking, that brings into focus a report issued today by the National Energy Board, which said lower prices, ample supply, and increased competition in key markets will further challenge competitiveness of Canadian natural gas and gas exports.

The Board’s latest market assessment presents an outlook from the beginning of this year to the end of 2017.

It says while decreased capital expenditures caused by declining oil prices are expected to reduce total deliverability, high-grading by producers to pursue the best targets in both Canada and the United States may improve per-well deliverability.

It also says additional drilling could occur here in Western Canada, as some producers may attempt to establish natural gas reserves and assess deliverability potential to confirm supplies for future LNG export projects.

In a mid-range price case, the Board forecasts prices falling from a 2014 high of $4.35 per million BTUs, to $3.55 in 2017.