A key indicator of future oil and gas drilling activity in Western Canada is sliding lower as the industry deals with a lack of pipeline capacity, oil production curtailments and difficulty accessing capital markets.

Sales of Crown drilling rights — necessary for energy exploration on land where mineral rights are held by the province — have plunged in B-C, Alberta and Saskatchewan this year.

Richard Masson, an executive fellow with the School of Public Policy at the University of Calgary, says the trend indicates a lack of enthusiasm to grow production in the oilpatch mainly due to insufficient pipeline space.

In Alberta, auctions are on track for a record low in 2019 with just 100-million dollars raised and two sales left to go.

The province looks likely to finish lower than the 137-million dollars it received in 2016, its lowest year on record.

In British Columbia, auctions have delivered 64-million dollars so far this year, down from 173-million last year and well short of the record in 2008 record of 2.66 billion.

In Saskatchewan, sales of drilling rights have raised about 22-million dollars, down from 51-million in six auctions last year and far back of the 1.1 billion raised in 2008. (Canadian Press)