The British Columbia government collected $25.38 million at its February land sale the last week of February – which included a single bid of $11.48 million – as operators continued consolidating land in the Montney fairway.
This is almost three-and-a-half times the amount seen in January 2014.
The provincial government sold a total of 5,977 hectares at a strong average price of $4,246.46 per hectare. After two sales so far this year, B.C. has attracted $32.74 million in bonus bids on 18,561 hectares at an average price of $1,764.08. To the same point last year, the industry had paid $14.69 million for 17,907 hectares at an average of $820.53 per hectare.
Standard Land Company Inc. paid the bonus high bid of $11.48 million for a 777-hectare parcel.
Steve Hager, senior exploration analyst with Canadian Discovery Ltd., said that this and two other undrilled northeast B.C. multi-section leases, which include all petroleum and natural gas (P&NG) rights, are located north and southeast of Encana Corporation’s developments in the Montney regional heritage resource play at Swan Lake and Sunrise and south of ARC Resources Ltd.’s Montney project at Dawson Creek.
Scott Land also acquired a 2,257-hectare parcel for $2.28 million at an average of $1,010.47, which had four tracts.
“This large northeast B.C. lease, which includes all P&NG rights below various Cretaceous and Jurassic zones, is located along the northern edge of the Buick Creek North Field southeast of [Storm Resources Ltd.’s] liquids-rich Triassic Montney gas project at Nig Creek and [Paramount Resources Ltd.’s] similar project at Birch,” Hager said.
Currently, there are no Montney horizontal wells licensed in the area of the subject parcel, he added.
Also, the government is once again making $120 million in royalties available for new road and pipeline projects under the Infrastructure Royalty Credit Program (IRCP).
Since 2004, the province has awarded over $830 million in royalties to eligible oil and gas companies through IRCP, resulting in more than 200 new or upgraded all-season roads and pipeline projects in B.C. over the past decade. These projects represent a total capital investment of more than $1.9 billion, without direct cost to the government.
The program requires oil and gas companies to fund the entire cost of an approved infrastructure project, such as a road. Once completed, the companies are then eligible to recover up to 50% of the project’s costs.
Oil and gas companies can apply for the latest installment of IRCP until April 16, 2014. Applications will be ranked according to their potential benefits with approval going to the projects that demonstrate the highest economic benefits to British Columbia.
The request for applications information can be found here.
