Not only is interest in the Saskatchewan oil patch continuing to grow, so is the landmass that is being explored in the pursuit of light, sweet crude oil.
Saskatchewan's sale of petroleum and natural gas rights brought in a very strong $47.9 million on April 9, raising the total for the first sales of 2014 to $98.5 million, a figure that already exceeds the $67.4 million that was obtained from all sales in the 2013 calendar year. There are four more sales scheduled in Saskatchewan this year.
Following a similar pattern from previous sales, the southeast region where the Bakken formation yields top results, led the pack in terms of interest and income with $42.8 million being spent for land in the Estevan-Weyburn region with the Lloydminster region being next at $2.3 million followed by the Kindersley region at $1.7 million and the southwest corridor at $1.2 million.
"We look forward to seeing these new dispositions begin development and providing new jobs and prosperity for the province," said Energy and Resources Minister Tim McMillan.
He was referring to the sale of a cluster of exploration licences between Assiniboia and Rockglen. Drilling in the early 1950s proved the presence of Bakken oil in that area, but the technology did not exist then to develop the resource. Now there is a good chance of something more positive coming from the exploration efforts in this specific region as the industry's association with the Bakken formation continues to spread out, hoping to extend the boundaries where this premium oil is found.
"With interest in this area rekindled after 50 years, we are hopeful the technological advances made in the interim can be applied to produce significant amounts of oil," McMillan added.
The price to land some of the exploration licences was not insignificant since Prairie Land and Investment Services Ltd. forked over $5.54 million each for two 5,180 hectare blocks located 35 kilometres west of the Roncott Bakken Sand Pool, 30 kilometres south of Assiniboia.
There were 11 exploratory licences offered in total and all were sold with nine of them located in the southeast region. The nine in the Estevan-Weyburn area sold for just under $26.81 million, for an average price of $591.20 per hectare. The two other leases were assigned to the southwest sector, and they were purchased for just under $1.07 million with Prairie Land and Investment buying one of them near Rockglen for $781,000.
Prairie Land and Investment was the top purchaser of acreage in the province, spending $20.356 million to acquire six exploration licences and two lease parcels. Five of their licences and one lease were in the southeast region where they spent $19.537 million.
Stomp Energy Ltd. paid the top price for a single lease when they purchased 518 hectares in the Tableland Winnipegosis Pool, 17 kilometres southwest of Estevan for $2.63 million.
The highest dollar per hectare in the sale was received from Silver Hawk Resources Ltd., who paid $9,312.56 per hectare for a 16.19 hectare parcel located adjacent to the Lashburn West Sparky Sand Oil Pool, 28 kilometres south of Lloydminster.
In the southeast region, besides the nine licences that were sold, 32 of the 36 leases that were offered were picked up for a total of $15.954 million or about $2,760 per hectare.
The highest dollar per hectare paid in this area of the province was received from Wood River Resources Ltd. who paid $7,778 per hectare for a 129.50 hectare parcel five kilometres east of Carlyle.
Parcels offering deeper rights only brought in $2.9 million, which represented 6.05 per cent of the total sale with an average price of $1,395.87 per hectare.
There were no gas prone parcels offered in the sale.
The next sale of Crown land for petroleum and gas drilling rights will be held June 2.
