NEWS BULLETIN

September 12, 2003 --- Vol. 9, No. 88September 2003

British Columbia oil and gas land auction breaks all records

British Columbia has shattered all Canadian records for a single oil and natural gas rights auction, reviving hopes for the province’s northeastern gas play.

The government collected C$418 million from its Sept. 3 sale, almost matching its 12-month record for 2001 and breaking the previous high for a one-day sale of C$138.8 million set by Alberta in December 2000.

About 450,000 acres was scooped up by E&P operators with the focus on a triangle formed by Dawson Creek-Tumbler Ridge-Chetwynd, which is close to Talisman Energy’s core Monkman area that produced 87 million cubic feet per day in the second quarter.

The identity of the major successful bidders remains confidential, with the bulk of the buying done by land brokers.

The largest single sale was to Petroland Services which paid C$39 million for 23,000 acres.

Other than Talisman, companies that are active in the region include Burlington Resources, EnCana, Apache Canada, Canadian Natural Resources, El Paso and Murphy Oil.

EnCana is also heavily committed to the Greater Sierra play, which holds an estimated 2.5 trillion cubic feet of recoverable reserves and where it is expected to drill 170 wells this year.

British Columbia Premier Gordon Campbell said the auction results were a “very bright light for us,” and sent a “very strong message” that his government, after two years of introducing royalty and regulatory incentives, is promoting private sector investment.

Steve Hager, an exploration analyst at Canadian Discovery, told the Financial Post the sale is likely an extension of the growing attention being given to deep gas plays rather than a reflection of any major discovery.


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