The June 7 sale of Saskatchewan petroleum and natural gas rights was a modest offering with a modest response, indicating the current state of business in the provincial oilpatch.
The 2016 calendar year’s total now stands at just over $12 million after the most recent sale brought in $3.9 million.
The public offerings of land for the purpose of drilling for oil and gas, are averaging $336 per hectare this year compared with an average price of $123 per hectare in neighbouring Alberta and $178 in British Columbia.
The Estevan and Kindersley areas continued to receive the most interest from the purchasers with $1.8 million and $1.5 million, respectively, in total successful offers.
The highest offer for a parcel of land this round was the $1 million for a 389-hectare lease west of the Energy City. Mammoth Land Services Ltd. was the successful bidder for this parcel which has the prospect of having multiple targets including the Bakken Formation and Three Forks Group/Torquay Formation. The per-hectare cost for this parcel was $2,654.
Saskatchewan is currently ranked first in Canada and is listed in the world’s top 10 in the Fraser Institute’s recent Global Petroleum Survey of petroleum executives in the category of attractive jurisdictions for investment in petroleum exploration and development.
The last public offering of Crown land in April fetched $3.07 million.
In this month’s offering there were no exploratory licenses issued but there were 83 leases up for grabs with 63 of them being purchased.
Mammoth, who made the largest single purchase was also the largest purchaser in total, spending just under $1.54 million for 18 lease parcels.
Broken down into regions, the Estevan-Weyburn sector saw 16 of the 18 leases offered, being purchased for a total of $1.88 million, an average of just under $483 per hectare. This compares with the $2.64 million realized in the April sale with an average price of $516.58 per hectare.
In the Kindersley area, 31 of 38 leases were picked up for a total of $1.53 million, an average of just over $191 per hectare. This compares with the $315,400 spent in the April sale which resulted in an average of $154.66 per hectare.
Northend Resources Ltd. was the top purchaser in the Kindersley region by spending over $484,000 for three parcels. They also paid the top price for a single lease in that area at around $172,000 for 259 hectares 25 kilometres northwest of Elrose.
The southwest region around Swift Current saw 14 of the 24 leases offered being picked up for a total of $477,663, an average of just under $138 per hectare. There were no parcels purchased in this area during the April sale.
In the Lloydminster area in the northwest region, there were only three leases up for bids with two of them being bought for a total of $30,251, an average of about $104 per hectare. This compares with the $114,328 spent in April, with an average of about $73 per hectare.
The next public offering of Crown petroleum and natural gas rights will be staged on Aug. 9.
