Crown land sales, along with the number of active drilling rigs, are two of the most indicative leading indicators of the oil industry in Saskatchewan. Forecasts for 2017 drilling are up from both the Petroleum Services Association of Canada and Canadian Association of Oilwell Drilling Contractors, and now land sales have seen a big uptick as well.
Driven by strong interest in an area prospective for heavy oil northeast of Lloydminster, the Ministry of Economy reported on June 8 that June's public offering of Crown petroleum and natural gas rights raised $22.8 million dollars on June 7 – the largest revenue for a single public offering in almost three years.
The total for the 2017 fiscal year to date is $24 million after two sales. The fiscal year's current average price per hectare for Saskatchewan parcels is $828.81, almost double Alberta's average of $470.71 for conventional oil and gas parcels, and comes in the wake of recent upward trends in provincial drilling activity.
“This is a significant revenue increase and the highest for any of Saskatchewan's past public offerings since August 2014,” Energy and Resources Minister Dustin Duncan said in a release. “Some of the most dynamic opportunities in Saskatchewan are those in our oil and gas sector, backed up by a world-class supply chain and a global reputation among the industry for low-risk investment.”
Millennium Land Ltd. bid $4,002,780 to acquire a 1,327-hectare exploration licence located southwest of Midale. The parcel is prospective for multiple targets, particularly the Bakken Formation and the Three Forks Group/Torquay Formation.
Two parcels northeast of Lloydminster in the St. Walburg area received bonus bids totalling $9,736,305 for 1,295 hectares, with one of these parcels receiving the highest dollar-per hectare at $8,116; these parcels are prospective for heavy oil in the Mannville Group, with well logs showing significant potential for the application of thermal recovery methods.
In southeast Saskatchewan, the total bonus received in the area was $7,769,097, an average of $1,729/hectare. This compares to $570,988, an average of $234/hectare at the last offering.
The top purchaser of acreage in this area was Millennium Land Ltd., who spent $5,232,212.32 to acquire five lease parcels and one exploration licence.
Top price paid for a single licence in this area was $4,002,780.76, paid by Millennium Land Ltd. for a 1,327.38 hectare parcel situated adjacent to the Torquay Main Torquay Oil Pool, 55 kilometres south of Midale.
A total of 38 leases were posted, and 32 sold in southeast Saskatchewan. Top price paid for a single lease in this area was $907,730, paid by Scott Land & Lease Ltd. for a 259 hectare parcel situated partially within the Oungre Ratcliffe Beds Pool, 60 kilometres west of Estevan.
The highest dollar per hectare in this area was received from Millennium Land Ltd., who paid $6,185.76/hectare for a 64.75 hectare parcel located adjacent to the Hoffer Ratcliffe Beds Pool, 75 kilometres southwest of Estevan.
The next public offering of petroleum and natural gas rights will be held on August 1, 2017.
