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Western Canada leasing: 2015 spend down as low commodity prices weigh on activity


Western Canada leasing: 2015 spend down as low commodity prices weigh on activity

Report summary

Western Canada attracted Cdn$373.57 million in lease bonuses in 2015, the lowest on record since Wood Mackenzie began keeping track in 1993. A total of 18,104 square kilometres (4.47 million acres) were acquired in 2015, almost a 26% increase from the previous year. Despite the year-on-year increase in acreage purchased, low bid prices per acre accounted for a higher percentage of the total number of bids. As acreage prices come down, it provides an opportunity for companies with strong balance sheets to invest counter cyclically and reload on acreage at lower prices. In 2016, operators will likely look for nearby expiring acreage within core areas in the hopes of opportunistically purchasing these leases before the lease is reverted back to the Crown. Overall, we expect 2016 leasing activity to remain muted and expect similar leasing results as 2015, especially if the low commodity price environment persists throughout the full year.

What's included?

This report includes 2 file(s)

  • Western Canada leasing: 2015 spend down as low commodity prices weigh on activity PDF - 2.39 MB 9 Pages, 1 Tables, 7 Figures
  • Western Canada leasing 2015.xls XLS - 689.50 KB

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

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  • 4.47 million acres acquired for total bonus spend of Cdn$373.57 million
  • Alberta continues to lead in annual acres leased
  • Saskatchewan acreage pricing fares better than most
  • British Columbia suffers largest leasing decline
  • Oil sands activity in 2015 driven by carbonate leases
  • Looking ahead: muted expectations for 2016

In this report there are 8 tables or charts, including:

  • 4.47 million acres acquired for total bonus spend of Cdn$373.57 million
    • Saskatchewan leads in 2015 Cdn$/acre
    • Alberta regains dominance of lease revenue
  • Alberta continues to lead in annual acres leased
    • Alberta 2015 vs. 2014 logarithm of Cdn$/acre distribution
  • Saskatchewan acreage pricing fares better than most
  • British Columbia suffers largest leasing decline
    • Map of 2015 lease results: bonus per acre with play area outlines
  • Oil sands activity in 2015 driven by carbonate leases
    • Oil sands leasing results over time
    • Month-to-month land sale activity
  • Looking ahead: muted expectations for 2016
    • Appendix: 2015 top leases by Cdn$/acre
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