Canadian land demand sets new record

It has taken only half a year to achieve what was once a milestone in the Canadian industry — surpassing the C$1 billion mark for exploration land sold at government auctions.

To the mid-point of 2005, companies invested C$1.08 billion in 4.9 million acres, beating the previous record set in 2001 by C$123 million.

The total acquisitions were 4.92 million acres, down fractionally from 4.99 million acres to the end of June 2004. The average price per hectare (1 hectare equals 2.471 acres) set a new high of C$539, an increase of 56 percent over last year and well above the previous record of $446 set in 1980 during an oil price spike triggered by the Organization for Petroleum Exporting Countries.

On top of the auction sales, companies added another 1.86 million acres for C$63.5 million in work commitments in the Northwest Territories and Saskatchewan.

Alberta, the dominant producing province, added C$758 million (including C$21 million for oil sands land) to provincial revenues, beating the 1997 record for the period of C$671 million, although the quantity of land dropped 3 percent from last year to 3.46 million acres.

The hot spot was the Foothills region of the Canadian Rockies, where bidders paid an average C$1,428 per hectare for 156,000 acres, close to triple the C$501 per hectare they paid for 168,000 acres they acquired in 2004.

There was no let up in the first sale of the second half, with 468,000 acres changing hands for C$96 million.Setting the standard was Saskatoon Assets, which forked over an average C$10,787 per hectare for 1,265 acres in central Alberta’s lively Pembina play, where a series of deep discoveries have been reported.

Pembina has attracted land buying totaling C$104 million for 177,000 acres in the past 18 months.

British Columbia maintained a sizzling pace, collecting C$252 million (the highest since the 2001 record of C$293 million) for 683,000 acres (off 11 percent from last year), with the average price per hectare rocketing to C$913 from $385 a year earlier.

Saskatchewan fattened its coffers by C$64 million, 73 percent ahead of the mid-point total in 2004, while the average per hectare price of C$255 was the best in 21 years, with the total land quantity climbing to 162,000 acres from 105,000 acres last year.

—Gary Park