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Oil sands spur Alberta land sales to C$1B Top dollar paid for exploration rights in recent sale in area officials view as best suited to steam-assisted gravity drainage Gary Park Petroleum News Canadian Correspondent
A mixed bag of one oil sands veteran and unknowns paid top dollars for leases in the latest sale of Alberta government exploration rights.
From oil sands pioneer Suncor Energy to companies bidding through brokers, close to C$83 million was invested in bitumen properties, led by a successful bid of C$45.2 million for 23,000 acres.
The purchase — a record single bid and new average price per acre — was made by O&G Resource Group on behalf of an unidentified operator. The land is in an area that provincial energy officials view as being best suited to steam-assisted gravity drainage technology, which melts the bitumen and forces it to the surface.
An adjacent lease of 16,500 acres was acquired for C$10.4 million by Antelope Land Services.
The parcels are close to the Fort Hills project, a joint venture by Petro-Canada and UTS Energy.
The oil sands attracted other strong prices, with Maverick Land Consultants forking over C$13.5 million for three leases covering 40,000 acres, Windfall Resources paying a total of C$10 million for 50,600 acres and Suncor Energy buying two leases totaling 10,750 acres for C$3.6 million. CanWest accumulates holdings One of the buyers was CanWest Petroleum, which paid C$864,625 for 23,040 acres as it accumulates land holdings in Alberta and Saskatchewan.
Its Firebag East permits in Alberta are in the same region as projects by Suncor, Imperial Oil, Husky Energy and Petro-Canada which aim to produce a combined 500,000 barrels per day from 14 billion barrels of reserves.
CanWest has three prospective targets to drill test, with potential pay zones ranging from 58 feet to 150 feet, ranging up to 11.5 percent oil by weight.
In Saskatchewan, CanWest’s Pasquia Hills project covers 50,000 acres and contains a resource of 4.3 billion barrels of oil shale, 59 percent of which is believed to be a petrochemical feedstock for the plastic industry.
The oil sands land grab, plus sales of conventional exploration rights, netted C$171 million for the Alberta government, lifting the year-to-date tally to C$1.11 billion for 4.89 million acres compared with C$707 million for 5.11 million acres at the same time in 2004. Connacher seeks regulatory approval In another development involving a junior oil sands player, Connacher Oil and Gas tossed its hat into the ring by seeking regulatory approval for a project that could produce 10,000 barrels per day over 25 years.
In addition to filing its applications the company is raising up to C$75 million in a bought-deal financing selling more than 27 million common shares at C$1.85 a share to a syndicate of underwriters.
Connacher has also granted the five underwriters an option to buy up to 13.5 million more shares at the same price.
Net proceeds will fund the Great Divide project, which will use steam-assisted gravity drainage technology to recover 90 million barrels of bitumen from a 68,480-acre lease. Start-up is scheduled for late 2006.
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