One of the unique characteristics of the oil and gas industry in this country is that it can act decisively.
When prices began to fall in the wake of the COVID pandemic, the industry responded quickly with deeper spending cuts, reduced production and downsizing. It had already been cutting as prices fell but the pandemic accelerated things.
Investment levels declined and development plans were shelved.
One indicator of how much things changed is the sales of drilling and exploration rights. The government offers them every two months. The latest was earlier this month and the industry offered up less than a half million dollars for the right to look for more production. Three-quarters of the money was directed towards the Estevan region.
This will give you an idea of how much things have changed. Four years ago, the same sale generated ten-times as for the provincial treasury, a good indicator of how drastically exploration budgets have slashed and how investment in the sector has dried up as the industry fights with low prices coupled with pipeline capacity.
Source:
https://www.saskatchewan.ca/government/news-and-media/2020/june/04/public-offering
