There was some good news for the Canadian oil and gas extraction industry in 2017 after being hit hard following the collapse of oil prices in late 2014.
Statistics Canada reported on Monday that total revenue for the industry increased 34.9 per cent to $118.5 billion in 2017, following a 10.9 per cent decline in 2016.
Meanwhile, total expenses and deductions decreased 10.2 per cent to $109.6 billion, resulting in a net gain of $8.9 billion in 2017, compared with a net loss of $34.1 billion in 2016, explained the federal agency.
“Higher prices were a contributing factor to the increase in revenue in 2017. According to the Raw Materials Price Index, the average annual price of crude oil and crude bitumen increased 19.4 per cent year over year, compared with an 8.0 per cent decrease in 2016. Meanwhile, the average annual price of natural gas increased 8.7 per cent in 2017, compared with a 12.0 per cent decline in 2016,” said StatsCan.
“Overall, capital expenditures in the oil and gas extraction industry rose 10.5 per cent to $42.5 billion in 2017. The gain was attributable to a 24.7 per cent increase in capital spending by the conventional oil and gas extraction sector, which was partly offset by a 10.5 per cent drop in spending by the non-conventional oil and gas extraction sector to $13.8 billion.”
The report said total operating costs decreased 1.7 per cent to $40.5 billion in 2017, following a 6.1 per cent decline in 2016. Operating costs in the conventional oil and gas extraction sector increased 4.1 per cent to $22.0 billion, while costs in the non-conventional oil and gas extraction sector were down 7.8 per cent to $18.6 billion.
Royalty payments totalled $6.6 billion in 2017, up 56.7 per cent from $4.2 billion in 2016.
“Canadian oil and gas extraction companies reported $573.9 billion in total assets in 2017, up 2.1 per cent compared with 2016. The increase in total assets was mainly attributable to a 4.6 per cent gain in net capital assets to $453.6 billion,” said Statistics Canada. “Over the same period, current liabilities rose 20.8 per cent while equity decreased 5.8 per cent.”
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.