On Feb. 24, the B.C. Ministry of Natural Gas Development put up two drilling licences and three parcels of land at its monthly petroleum and natural gas rights public tender.
Not one sold.
For the first time in history, the B.C. government is walking away away from an oil and gas land sale with $0 on the ledger.
It's the lowest total on record, and another sign of the dire toll low prices and market uncertainty are exacting on the B.C. oilpatch.
"I can't find anyone who can remember a zero-dollar land sale," said Energy Services BC director Art Jarvis. "It's very indicative of what 2016 is going to be like. There's all sorts of indicators in the last little while that have been frightening people in business."
Rights to drill for gas are leased for terms of five to ten years. The land sale typically accounts for the majority of the province's oil and gas revenues, with natural gas royalties making up the balance.
The ministry confirmed it was the first time the province received no successful bids at a land sale.
"The prices received reflect a lower number of hectares being requested and a reduced geological potential in comparison to previous years," a ministry spokesperson said in an email.
Seen better days
Ten of the top-25 sales came in 2008—a banner year for the industry.
The best-ever land sale was July of that year, when the province leased $610 million in land and drilling rights. May 2008 saw a record $9,537 paid per hectare.
Last month, the sale netted just $200,000 at an average $76 per hectare, continuing the trend of 2015, which was among the worst years on record.
Income from earlier windfalls continue to prop up the province's oil and gas revenues, but those revenues are projected to shrink unless significant progress is made on the province's liquefied natural gas (LNG) export industry.
While royalties are expected to grow over the next few years, the province announced $120 million in royalty credits on the day of the land sale to "attract new, long-term investment in the natural gas and oil sector."
Jarvis said that while low land sales bode poorly for future oil and gas activity, that doesn't mean the industry will grind to a halt.
"What it means, for one, is there's no new players coming here," he said. "But the land sales have been so huge for so long now that these producers who can afford to do this new horizontal drilling have purchased enough property that they haven't (fully) explored it. They have a lot of room to do what the need to do in the next little while."
B.C. accounts for around 15 per cent of total Canadian oil and gas investment.