Passport Energy Ltd PPOZF

Land prices keep rising in this play

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August 16,2010

The latest evidence of a resurgent oil and gas sector came Thursday, thanks to a robust August sale of Crown petroleum and natural gas rights.
August's sale brought in $95.8 million in revenue for the province, the second-highest total for an August sale. Total land sale revenue for the 2010 calendar year now stands at $371.6 million, up significantly from the $50.8 million at the same time last year.
"After a slower 2009, our industry has picked up the pace this year with increased drilling, spin-off economic activity and, of course, the new investment that's represented in the acquisition of these oil and gas rights," Energy and Resources Minister Bill Boyd said.
"It all speaks to the continuing attraction by the industry to both our resource base and the supportive business climate we have here in Saskatchewan."
Boyd said that while all producing areas of the province generated interest, the Bakken-prone lands in southeast Saskatchewan once again drove activity in the sale, accounting for more than three-quarters of total revenue.
On the strength of the Bakken play, the Estevan-Weyburn area received the most bids with sales of $79.3 million. The Lloydminster area was next at $10.4 million, followed by the Kindersley-Kerrobert area at $3.6 million, and the Swift Current area at $2.5 million.
August's sale included nine petroleum and natural gas exploration licences that sold for $44.9 million and 274 lease parcels that attracted $50.9 million in bonus bids.
The highest price on a per-hectare basis was $46,512. Petrobakken Energy Ltd. bid $9.1 million for a 195-hectare lease parcel, also near Arcola.
The $1,433 per hectare average from the August sale again compared favourably to the average per hectare prices recorded in the most recent land sales in Alberta ($375) and British Columbia ($1,462).
The next sale of Crown petroleum and natural gas dispositions will be held on October 4.