Southeast Saskatchewan was back on top in terms of attracting the most interest and dollars in the sale of Crown petroleum and natural gas dispositions during the April 12 public offering by the Ministry of the Economy.
The sale of land rights raised a modest $3.1 million for government coffers, brining the fiscal year’s total to $8.1 million.
Even with a modest land offering, the purchasers continued to pay premium prices on a per-hectare basis. So far in 2016 the public offerings have averaged $404 per hectare in Saskatchewan compared with $114 per hectare in Alberta and $243 per hectare in British Columbia.
The recent sale saw the Estevan area receive the most bids at $2.64 million with the highest single parcel being sold to Stomp Energy Ltd., who spent $1,133,308 in acquiring two lease parcels of 259 hectares just west of Estevan, it was also ranked as the highest price paid on a per-hectare basis at $4,265 since it sits in a proven oil production zone in the Bakken formation, Three Forks Group/Torquay formation and the Midale Beds.
The April sale compares to the $5.05 million received in the previous land sale held in February.
There were no exploratory licences issued during this sale, and just 44 of the 80 leases on offer, were snapped up by the bidders.
Gas prone areas attracted bonus bids of $5,000 for 259 hectares, or just $19.31 per hectare.
In the Estevan area, the average price per hectare amounted to $516.58. This compares to the $4.05 million raised at the February sale with an average of over $605 per hectare being realized.
In the southeast sector, 29 of 36 leases were picked up .
In the Lloydminster area, nine of the 10 leases were purchased for a total of $114,328, an average of $72.81 per hectare.
In the Kindersley area in the west-central region, $315,451 was spent on the purchase of six leases out of the 32 that were offered with an average of $154.66 per hectare.
No leases were purchased in the Swift Current area with only two being offered.
The raising of investment capital is one of the problems now facing the industry, said Bill Boyd, minister of the economy, but Saskatchewan continues to attract interest since its “reputation as an opportunity-rich, low-cost operating environment is unchanged among conventional producers, and the province is well positioned for the moment when prices rebound,” said Boyd.
The next sale of petroleum and natural gas rights will be held on June 7.