A pair of licences in the North Montney development area combined for bids of $13.93 million, accounting for just over 80 per cent of the spending at British Columbia’s May land sale held this week.
The province sold 11,500 hectares for $17.11 million at its May 21 auction at an average price of $1,487.65. Year-to-date, B.C. has collected just under $80 million on 50,229 hectares at an average price of $1,592.61. To the same point of 2013, industry had paid $118.16 million for 58,470 hectares at an average price of $2,020.81.
Both high-priced North Montney licences, adjacent to where several companies, including Progress Energy Canada Ltd., are working, were acquired by broker Sekani Resources Ltd. One of these parcels produced the auction bonus high bid of $8.17 million for a 3,369-hectare parcel, which generated an average price of $2,423.80. The parcel included three tracts and several units at 94-H-03.
The other parcel acquired by Sekani produced the average price high of $2,931.78. The broker picked up the 1,965-hectare licence for a bonus of $5.76 million. It also included three tracts and several units at 94-H-03.
“The motivation for the high prices looks pretty straightforward here,” said Brad Hayes, president of Petrel Robertson Consulting Ltd. “The Montney fairway continues to gradually expand as companies drill and understand what it takes to produce economic rates and reserves.
“This is particularly true in the western part of the fairway, where these parcels are posted, and where there is multi-zone potential within the Montney in most areas.”