Natural gas discoveries send Alberta land sales soaring
Gary Park
Shell Canada’s early-December report of a big-league natural gas find in Alberta’s Foothills region helped trigger the province’s largest land auction of 2004 and pushed the annual sales over C$1 billion for the sixth time.
Raking in C$109 million from the final sale, the government tallied C$1.11 billion for 2004, just C$40 million short of the 1997 record.
Shell’s claims of a discovery in the range of 500 billion to 800 billion cubic feet, using advances in 3-D seismic technology, gave the biggest lift in years to those who have argued that the Western Canada Sedimentary basin is far from a spent force.
The optimism spilled over to the Dec. 13 land sale when 268,075 hectares (one hectare equals 2.471 acres) changed hands at an average C$406.37 per hectare, or C$50 above the average for the entire year.
The Pembina Nisku area west of Edmonton set the pace in the wrap-up sale, with Appaloosa Resources paying C$5.06 million, or an almost unprecedented C$21,889 per hectare, for 256 hectares about 6 miles northeast of Drayton Valley.
A smaller offering went for C$1.3 million or C$20,886 per hectare.
Finishing on such a high note gave added impetus to what was already an upbeat year, with sales generating an average C$355 per hectare for 3.12 million hectares, compared with 2003’s per-hectare average of C$288 for 3.14 million hectares.
Gregg Scott, president of Scott Land & Lease, which bids on behalf of unidentified buyers, said the Shell Canada discovery so close to Calgary gives a shot of confidence to the industry.
British Columbia posted a more normal year, collecting C$232 million for 540,427 hectares at an average C$430 per hectare.
That was a sharp drop from last year’s total of C$647 million from 737,000 hectares at an average C$882.
But 2003’s numbers included an anomaly when EnCana paid C$418 million for about 200,000 hectares at its Cutbank Ridge gas play in northeastern British Columbia.
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