Sales of oil, gas rights stronger than 2016

Min­is­ter cred­its surge in in­dus­try

Regina Leader-Post - - CITY + REGION -

The lat­est sale of Saskatchewan’s oil and nat­u­ral gas rights net­ted $9.6 mil­lion, bring­ing the yearly to­tal to $61 mil­lion with one sale re­main­ing — well above last year’s an­nual to­tal of $50 mil­lion.

The Dec. 5 to­tal rep­re­sents a 32 per cent de­crease from the De­cem­ber 2016 sale. En­ergy and Re­sources Min­is­ter Nancy Hepp­ner sug­gested the high an­nual to­tal re­flects an up­ward surge in the in­dus­try.

“Drilling ac­tiv­ity, oil and gas re­lated rev­enue, and in­dus­try in­vest­ments in new ex­plo­ration and de­vel­op­ment are all trend­ing up­ward in Saskatchewan for 2017,” the newly ap­pointed min­is­ter said Thurs­day in a state­ment.

Ac­cord­ing to the provin­cial gov­ern­ment’s sum­mary of the sale, in­ter­est in oil and gas rights was con­cen­trated in the Este­van area, where buy­ers spent a to­tal of $5.1 mil­lion on rights for 6,574 hectares — an av­er­age of $773.40 per hectare.

The Lloy­d­min­ster area net­ted the gov­ern­ment $3.1 mil­lion, but buy­ers paid a premium for rights in the bor­der city re­gion: an av­er­age of $2,565 for each of the 1,214 hectares sold ear­lier this week.

Sales in the Swift Cur­rent re­gion, mean­while, to­talled $403,050 while buy­ers paid a to­tal of $949,462 for oil and gas rights in the Kin­der­s­ley area, ac­cord­ing to gov­ern­ment data pub­lished Thurs­day.

Ac­cord­ing to the gov­ern­ment, the top pur­chaser was Stomp En­ergy Ltd., which paid $2.5 mil­lion for rights.

The sin­gle high­est price paid for a lease — $68,013 — came from the City of Medicine Hat.

The gov­ern­ment re­ported last month that drilling ac­tiv­ity over the first 10 months of the year was up 80 per cent com­pared to 2016, with an­nual oil pro­duc­tion fore­cast to in­crease 6.1 per cent this year.

“Saskatchewan’s favourable policy and op­er­at­ing en­vi­ron­ment pro­vides the in­dus­try with the kind of sta­bil­ity it seeks … We will do our part to help sus­tain this growth,” Hepp­ner said in the state­ment.

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