Land rush in Canada sees British Columbia setting new benchmark

Gary Park

Government auctions of petroleum and natural gas rights in Canada’s three major producing provinces have defied slumping commodity prices and cash flows.

The sales are viewed as a barometer of industry confidence, signaling exploration intentions.

British Columbia, led by its northeastern gas plays, soared to a new record C$439.47 million, easily breaking the previous record C$248.24 million in 2000.

Alberta wrapped up its year by topping the C$1 billion mark for the third time in the last five years.

With a final tally of C$1.09 billion, Albert was only C$46.3 million behind last year’s pace, which included a special Suffield gas sale of C$102.41 million in the province’s southeast corner. The all-time high remains the C$1.15 billion invested in 1997.

Saskatchewan’s total revenue was C$56.21 million, compared with last year’s C$48.33 million, representing its best year since logging C$131 million in 1997.

Bidders in Alberta acquired 3.91 million hectares (one hectare equals 2.471 acres) at an average C$277.80 per hectare, reflecting some industry unease after last year’s average C$298.08 per hectare for 3.83 million hectares.

The province’s fourth quarter take totaled only C$181.73 million, barely half the final quarter of 2000, which analysts said reflected the precipitous drop in commodity prices.

But optimism in British Columbia reached new heights, with buyers scrambling to accumulate exploration prospects in the gas-rich northeastern corner. They paid an average C$514.48 per hectare for 742,726 hectares compared with last year’s average C$358.26 for 609,9879 hectares.