Government of British Columbia

Government of British Columbia

December 17, 2009 13:14 ET

Government of British Columbia: 2009 Year-End Natural Gas and Oil Rights Sales Hit $893M

VICTORIA, BRITISH COLUMBIA--(Marketwire - Dec. 17, 2009) -

NEWS RELEASE

For Immediate Release

2009EMPR0023-000786

December 17, 2009

Ministry of Energy, Mines and Petroleum Resources

2009 YEAR-END NATURAL GAS AND OIL RIGHTS SALES HIT $893M

VICTORIA - B.C.'s natural gas and oil rights sales for December generated $172.3 million in bonus natural gas bids, bringing the 2009 calendar year total to just under $893 million making it the third-best calendar year total in history announced Minister of Energy, Mines and Petroleum Resources Blair Lekstrom.

"These numbers are a clear indication that the Province's natural gas stimulus package is working," said Lekstrom. "B.C. continues to be one of the most competitive natural gas jurisdictions in North America and this stimulus package will further strengthen the sector while increasing provincial revenues."

The ministry conducted a survey of producers to determine the impact of the Oil and Gas Stimulus package. PricewaterhouseCoopers validated the methodology and global results of the survey.

The survey shows the stimulus package has encouraged surveyed producers to increase their expected 2010 investment by $0.6 billion (or 38.4 per cent), to a total of $2.1 billion in 2010. In addition, the stimulus has given surveyed producers the incentive to increase their expected 2010 wells by 105 (or 57.4 per cent).

"The stimulus package was directly targeted to the natural gas industry," said Lekstrom. "With natural gas bridging the way to a renewable future, it has the added benefit of burning cleaner than other fossil fuels, thus reducing greenhouse gas (GHGs) emissions. In a world where reducing our carbon footprint is critical, natural gas is an excellent option for reducing emissions."

The Dec. 16 sale offered 98 parcels in northeast B.C. covering 50,202 hectares, and sold 91 parcels covering 48,280 hectares. The average price per hectare was $3,569.

The key parcels in the sale included:

- Six drilling licences in the Western Horn River Basin, approximately 70 km northwest of Fort Nelson. Bids of between $1,176 and $7,109 per hectare totalled over $121 million.

- 61 leases in the Blair Creek area, approximately 90 km north of Hudson's Hope, that totalled over $49 million, with a per hectare bids ranging between $1,022 and $4,670.

Drilling licences provide the exclusive right to explore for natural gas by drilling wells. They are acquired by the successful bidder at the Crown sale, and primary terms are three, four or five years, depending on location.

Leases provide the exclusive right to produce petroleum and natural gas and are acquired by the successful bidder at the Crown sale or selected from permits and drilling licences. Primary terms are five or 10 years, depending on location.

"Attracting new royalty investment through stimulus was an innovative approach to the global economic slowdown," said David Pryce, vice-president, operations, of the Canadian Association of Petroleum Producers. "B.C. has not only retained investment, but helped generate jobs by enhancing a competitive business climate."

The next sale is scheduled for Jan. 20, 2010 and will offer 20 parcels covering 10,745 hectares.

Complete results of the sale are posted on the website of the Ministry of Energy, Mines and Petroleum Resources:

www.em.gov.bc.ca/Subwebs/landsale/results/default.htm.

The stimulus package survey report is posted at:

http://www.empr.gov.bc.ca/OG/oilandgas/royalties/Pages/default.aspx.

For more information on government services or to subscribe to the Province's news feeds using RSS, visit the Province's website at www.gov.bc.ca.

Contact Information

  • Ministry of Energy, Mines and Petroleum Resources
    Jake Jacobs
    Public Affairs Officer
    250 952-0628
    250 213-6934 (cell)
    www.gov.bc.ca