|
Alberta Natives sign land lease deals
Gary Park For Petroleum News
The Blood Tribe of southern Alberta, the largest landholder among Canada’s First Nations, will collect a one-time payment of C$50 million and a 25 percent working interest through two oil and gas agreements.
The deals signed with Murphy Oil and Bowood Energy cover five-year leases and could generate millions of dollars in revenues for the Blood community, said David Shade, general manager of Kainaiwa Resources, the Blood agency that negotiated the contracts.
He said the potential revenue could be “quite significant,” extending well beyond the upfront bonuses if the exploration program succeeds.
Cash could be distributed Cash from the working-interest option will remain with the Blood Tribe and could be distributed on a per-capita basis or used to boost the tribe’s economy by creating more jobs in the petroleum industry.
The Blood land already has 114 shallow producing wells with a number of companies. Because of new drilling technology, the next wells will be drilled much deeper.
The leaseholders will pay double the Alberta government royalty rate for the first year of any production, then equivalent rates for the rest of the terms.
The contracts also provide the tribe with employment, contractual and business opportunities on all of the operations.
Bowood said its agreement covers an interest in 60,640 contiguous acres in the emerging southern Alberta Bakken play “on a trend and highly prospective for Devonian-Mississippian oil potential and other prospective formations.”
It said the majority of the lands include all petroleum and natural gas rights, with only a few shallow zone exclusions.
Bowood said the lease will add to its position in the Bakken fairway, where it will hold a 100 percent working interest in 104,000 net acres.
Conditions, including drilling The leases require the company to make a total upfront payment of C$14.13 million, pay an annual rent of C$5 per hectare (2.471 acres) totaling C$122,000 a year and drill one well to a minimum depth of about 3,300 feet in each of the first two years and two wells in each of the remaining three years.
Bowood has also filed a preliminary prospectus which it hopes will raise gross proceeds of C$15 million-$20 million.
Murphy said it will acquire 129,280 acres and is committed to drill 16 wells over five years.
Murphy Chief Executive Officer David Wood said the acquisition gives his company a fourth resource play in North America, in addition to acreage in Seal Lake, Montney and Eagle Ford, building on a land position in the Exshaw-Bakken play where the company is targeting oil prospects.
| 