BC's $98M August Nat Gas and Oil Sale

Source: Yahoo! Finance  (8/26/10)

"This sale, like others this year, is larger than predicted. . ."


The August 2010 nat gas and petroleum sale resulted in over $98M in bonus bids, bringing the calendar year total to over $760M.

"This sale, like others this year, is larger than predicted and is more evidence of the confidence the international investment community has in British Columbia's natural gas and petroleum resources," said Energy, Mines and Petroleum Resources Minister Bill Bennett. "This confidence, matched with our rich resources, is powering our economic recovery—creating good jobs and revenues for government."

The Aug. 25 sale offered 81 parcels in NE BC, covering 34,349 hectares, and sold 68 parcels covering 31,052 hectares. The average price per hectare for this sale is $3,160.

Key parcels in the sale included:

- Two drilling licenses in the Kiwigana River area, 70 km NW of Fort Nelson, with bids of $5,780 and $9,859/hectare for a total of over $64M.

- Twenty-two leases in the Blueberry area, 80 km NW of Fort St. John, with bids ranging from $2,566–$5,137/hectare for a total of over $27M.

Drilling licenses provide the exclusive right to explore for natural gas by drilling wells. They are acquired by the successful bidder at the Crown Sale, and primary terms are three, four or five years, depending on location.

Leases provide the exclusive right to produce natural gas and petroleum. They are acquired by the successful bidder at the Crown sale, or selected from permits and drilling licenses. Primary terms are five or 10 years, depending on location.

Natural gas and petroleum activities play a vital role in BC, generating significant wealth and employing thousands of British Columbians. Revenues from rights sales provide immediate economic benefits, funding vital social programs and infrastructure development throughout the province.

The next sale, scheduled for Sept. 22, 2010, will offer 71 parcels covering 35,197 hectares.