Slumping gas prices punish Canadian land sales

Average prices dive 32 percent in the third quarter, but governments still on track to beat last year’s record; Alberta leads bidding and B.C. gas targets remain popular

Gary Park

PNA Canadian Correspondent

Floundering natural gas prices have started to drag down government sales of exploration rights across Canada, with average prices dropping almost 32 percent in the third quarter.

Companies paid C$374 million for the three-month period, but total sales of C$1.3 billion to the end of September still suggest the 2001 tally could surpass last year’s record C$1.51 billion.

Where the slump in commodity prices has been most apparent is in average prices, which fell to C$275 per hectare (one hectare is 2.471 acres) from C$404 in the second quarter and C$299 for all of 2000.

Successful bidders paid almost C$904 million for 2.93 million hectares in Alberta over the first nine months, although third quarter averages dropped sharply to C$247 per hectare from C$412 in the second quarter to reach a two-year low.

Saskatchewan, primarily a heavy-oil producing province, was also hit hard, with prices falling to C$160 per hectare in the third quarter from C$207 in the first half. Sales for the nine months fetched C$20.3 million against C$48.3 million for all of 2000.

British Columbia, which was also punished by falling and values, continued showing strength as bidders pursued natural gas exploration prospects in the province’s northeast corner.

They paid an average C$472 per hectare in the third quarter compared with C$613 in the first three months and C$502 in the second quarter. For all of 2000 the average was C$358.

British Columbia’s nine-month sales total was C$383.9 million, far ahead of the 12-month record of C$248.2 million achieved last year.

On the frontiers, the East Coast offshore has yet to complete any sales this year.

The Northwest Territories has pocketed C$17.4 million at an average C$43.75 per hectare. Its 2000 total was C$523.9 million at an average C$281 per hectare.

Yukon sales this year have collected C$20.3 million at an average C$46.76 per hectare.