You must be well connected, indebted...
as your "rumor" seems to have some basis in fact.
Hopefully this will help to get RED onto a few radar screens. Trading waaaaaay under NAV now and probably less than 2X 2007 cash flow numbers.
Does give us a big toe hold in Saskatchewan, which is starting to look like a good place to be searching for hydrocarbons. Would not like to sound to over-the-moon, but was enough to start me averaging down - something I do not often do.
the optimist
Oil, gas fever fuels $32M in land sales
Bruce Johnstone, Leader-Post
Published: Saturday, April 15, 2006
Continued interest in high-priced southeastern oil and southwestern gas drove April land sale revenues to $31.8 million, Saskatchewan Industry and Resources said Thursday.
"It's more than twice what we gathered last year at this sale,'' said Ed Dancsok, director of the geology and petroleum lands branch. "It's a good start to the new fiscal year.''
On a calendar-year basis, the April sale brings total sales of Crown oil and natural gas rights to $67.8 million in 2006, compared with $43 million for the same period last year. Dancsok said land-sale activity was "very robust" in both the southeast oil-prone areas and southwest gas-prone areas.
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"When you get the industry going after the southeast oil and the southwest gas at the same time, that's why we've got two sales over $30 million,'' he said referring to February's sale of just under $36 million.
The Weyburn-Estevan area saw the most activity, with $14.6 million in bonus bids. The Swift Current area was next at just over $7 million, followed by the Kindersley-Kerrobert area at $5.6 million and the Lloydminster area at $4.5 million.
Gas-prone areas of the province netted $11.5 million in bonus bids.
The highest price received for a single parcel was $3.3 million by Western Land Services Co. Ltd., which purchased a seven-section exploration licence just north of Redvers in the southeastern corner.
"We see that as targeting the Bakken'' formation, Dancsok said, referring to the deeper oil play in southeastern Saskatchewan which began with the discovery of light oil by Bison Resources in 2003.
The top price paid for a single lease in the April sale was $1.2 million by Cavalier Land Ltd. for a 518,000-hectare parcel 15 km north of Consul.
Dancsok said discoveries on the Alberta side of the border and changes to the royalty regime are encouraging more companies to come to Saskatchewan.
"The border is disappearing, you could say. Companies can drill on the other side of the border and reap the same benefits. I think we're competitive with Alberta now.''
The most unusual aspect of the April sale was the special exploratory permit covering close to six townships in the Big River area, northeast of Prince Albert. The permit, which requires a work commitment of $420,000 over the next two years, was awarded to Redstar Oil and Gas Inc.
Dancsok said the Calgary-based junior will likely have to drill at least two wells under the work commitment. "This company is new to the province, ... but they have big foothold in Saskatchewan now. Maybe they'll make something of it.''
Another area of increasing interest is the oilsands area north of La Loche in northwestern Saskatchewan. Oilsands Quest of Calgary has staked more than half a million acres of land in the hopes of developing Saskatchewan's first oilsands project.
Dancsok said regulations on oilsands development, which were formulated in the 1960s, are being updated. "Hopefully, in six months to a year, we will be offering oilsands properties in Saskatchewan and who knows where that will lead. ... The sands don't stop at the border.''
The next sale of Crown petroleum and natural gas dispositions will be June 13. With 354 parcels, including 195 in the southeast and 71 in the southwest, the June sale promises to generate "similar numbers" to the April and February sales, Dancsok said.