Oil and Gas Right sales remain quiet in Saskatchewan

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The April sale of petroleum and natural gas rights continues to follow a trend of quieter sales in Saskatchewan.

The sale results generated $7.7 million in revenue for the province, the lowest province wide total in 24 sales which dates at the way back to Feb. 2009 when $6.3 million was generated.

After two sales in 2013, year-to-date revenue from land sales total $19.6 million, also the lowest total since 2009 when $18 million was generated to start the year.

The Weyburn-Estevan area led the province in bid activity at $5 million, followed by the Lloydminster area with $1.1 million, followed by $1 million from the Swift Current area, while the Kindersley-Kerrobert area recorded just $623,103 in activity.

“While land sale activity has been comparatively quiet over the past year if you consider the all-time record set back in 2008, it is to be expected as industry concentrates on drilling the huge inventory of land that has been acquired,” Energy and Resources Minister Tim McMillan stated in a press release. “There are a significant number of leases up for renewal in the next few years and we expect that much of that land will revert back to the Crown and, as a result, there could be increased land sale revenue.”

“Industry continues to pay a premium for the lands it acquires, with this sale averaging more than $900 per hectare,” McMillan added.  “Drilling activity is steady, and with major investments by industry in secondary recovery projects that have the potential to increase production from the Bakken, the future looks bright for Saskatchewan’s oil patch.”

The Southwest did produce a sale bright spot, as the highest price on a per-hectare basis was $25,525 when Scott Land & Lease Ltd. bid $826,252 for a 32-hectare lease parcel west of Shaunavon.

The highest price paid for a single parcel was $3.1 million when Federated Co-operatives Limited acquired an 807-hectare exploration licence near Corning.

The next sale of Crown petroleum and natural gas dispositions will be held on June 3.

Geographic location: Saskatchewan, Swift Current, Shaunavon

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