In their most recent fall report, Statistics Canada said they had recorded an overall downturn in oil and natural gas extraction in Canada in 2015, largely attributable to the continued decline in the prices of crude oil and gas.
From June 2014 to December of 2015, the price of crude oil and crude bitumen fell 55 per cent according to the Raw Materials Price Index. During that same time frame, the price of natural gas decreased 23 per cent.
As a result of these declines, capital expenditures in the oil and gas production industry fell 33.7 per cent to $53.5 billion in 2015. This was the first drop in five years and was mainly attributable to the conventional oil and gas extraction sector where capital spending was down 34.8 per cent to $30.6 billion. The non-conventional oil and gas extraction sector also contributed to the decrease with capital expenditures there going down 32.2 per cent to $22.9 billion.
Operating expenditures were down 20.7 per cent as a result, sliding to $49.2 billion last year, mainly as a result of fewer royalties incurred ($11 billion).
Compared with 2014, the non-conventional oil and gas extraction sector reduced its operating expenditures by 22.6 per cent to $23.3 billion. At the same time, operating expenditures in the conventional oil and gas extraction industry fell 18.9 per cent to just under $26 billion.
In 2015, production volumes for both crude oil and equivalent products and natural gas continued to increase. However, falling prices resulted in widespread declines in the production value, said the Stats Can report.
Production of crude oil (and equivalents) rose 1.9 per cent to 213.6 million cubic metres last year, marking the sixth consecutive annual increase. Compared with 2014, the value of these products fell 41.4 per cent to $68.4 billion.
Marketable production of natural gas rose 1.3 per cent to 149.1 billion cubic metres while its value decreased 38.6 per cent to $14 billion.
Decreases in the price and production value of crude oil and natural gas led to a decline in revenue for the industry, down 36.6 per cent compared with 2014 to just under $100 billion in 2015.
Total expenses and deductions increased 2.4 per cent to $149.3 billion resulting in a net loss of $49.4 billion in 2015, compared with a new income of $11.8 billion in 2014.
Total assets of oil and gas extraction companies in Canada declined 3.2 per cent in 2015 compared with 2014. Total long-term debt was up 31.3 per cent year over year to $147.7 billion.
