Saskatchewan’s first sale in the 2016 calendar year of petroleum and natural gas rights raised $5.1 million in revenue for the province. This brings final land sale revenues for fiscal 2015-16 to $44.0 million.
While land sale revenues show evidence of the current oil market cycle, industry continues to place a premium on the lands they are acquiring in Saskatchewan. The province continues to be a preferred jurisdiction for conventional producers.
February’s sale averaged $444 per hectare, compared to Alberta’s latest sale that averaged $117 per hectare and British Columbia’s that averaged $76 per hectare.
“Oil prices continue to have an impact on activity across western Canada, as industry exercises caution in increasing their land inventories,” Economy Minister Bill Boyd said. “At the same time, Saskatchewan lands are at a premium, reflecting our reputation as the top jurisdiction in Canada, and among the top 10 in the world, for petroleum investment attractiveness.”
The Weyburn-Estevan area led the way this sale, accounting for 80 per cent of the sale total. Four parcels located west of Estevan received bonus bids totalling $2.1 million from Mammoth Land Services Ltd. The region has multiple zones of interest including the Torquay and Bakken Formations along with the Midale Beds of the Madison Group.
The highest price on a per-hectare basis was $5,006. Mammoth Land Services Ltd. submitted a bid of $162,069 on a 32 hectare lease located south of Arcola.
The Fraser Institute’s most recent annual Global Petroleum Survey of petroleum executives rated Saskatchewan number one in Canada and among the global top 10 in its rankings of attractive jurisdictions for investment in petroleum exploration and development. Saskatchewan scored highly in the 2015 survey relative to other jurisdictions in regards to policy, investment and regulatory climate, geopolitical risk, administrative certainty, labour regulations and employment agreements, environmental regulations, trade barriers, taxation regime and quality of its geological database.
The next sale of Crown petroleum and natural gas rights will be held on April 12, 2016.
