Government of British Columbia

Government of British Columbia

October 22, 2009 12:44 ET

Government of British Columbia: October B.C. Oil and Gas Rights Sale Highest for 2009

VICTORIA, BRITISH COLUMBIA--(Marketwire - Oct. 22, 2009) -

NEWS RELEASE

For Immediate Release

2009EMPR0017-000519

October 22, 2009

Ministry of Energy, Mines and Petroleum Resources

OCTOBER B.C. OIL AND GAS RIGHTS SALE HIGHEST FOR 2009

VICTORIA - B.C.'s economy has received a much-needed boost with the October 2009 land rights sale, which resulted in $370 million in bonus bids, the sixth-largest sale on record, announced Minister of Energy, Mines and Petroleum Resources Blair Lekstrom. This brings the calendar year to date total to $700.6 million.

"This sale is great news for the province and shows that our innovative approach to royalty programs attracts investment," said Lekstrom. "B.C. is leading the way in developing a vibrant natural gas industry that will continue to drive the provincial economy."

This was the second-highest per-hectare sale in the history of B.C. at $5,625.30, and is an example of how our innovative approach to royalty programs works.

"B.C. is one of the most competitive natural gas jurisdictions in North America, and the results of the stimulus package show that companies feel secure investing here," said Lekstrom. "In this day and age capital investment is very fluid, and we want to encourage companies to do business in B.C."

The August stimulus package has the advantage of not requiring direct government spending to increase activity and investment, while generating positive revenue to the Crown. In a conservative scenario, after three years the program will generate $2.50 in net incremental revenues for every one dollar of royalty credit provided. Since these are royalty credits and not expenditures, the Crown benefits from the activity, in addition to royalty revenue generated from wells that would likely not have been drilled.

The Oct. 21 sale offered 62 parcels covering 66,837 hectares, and sold 58 parcels covering 65,787 hectares. The average price per hectare was $5,625, which is the second-highest in B.C. history.

The key parcels in the sale were in the Montney and included:

- Four drilling licences near the Altares Field area, approximately 20 km north of Hudson's Hope, which totalled over $201 million. Bids ranged from $4,088 to $18,650 per hectare.

- Eight drilling licences near the Cypress Field, approximately 80 km northwest of Hudson's Hope, with bids that ranged from over $3,000 to over $7,000 per hectare and totalled over $56 million.

"The natural gas industry generates jobs and provides stability to families in B.C," added Lekstrom. "This sale is a strong indication that the natural gas industry continues to play an important role in bringing vitality and economic prosperity to B.C. communities."

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.

The next sale is scheduled for Nov. 18, 2009 and will offer 44 parcels covering 21,267 hectares.

A backgrounder follows.

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.

BACKGROUNDER

October 22, 2009

Ministry of Energy, Mines and Petroleum Resources

OIL AND GAS BRINGING PROSPERITY TO COMMUNITIES

The 2009 calendar year has resulted in over $700.6 million in bonus bids. Oil and gas plays a pivotal role in British Columbia's economy, accounting for more than 28 per cent of B.C.'s provincial resource revenue. The industry has been the province's top earner since 2001 and generates over $2 billion in Crown revenues annually. Since 2001, the oil and gas industry has invested $37.8 billion in British Columbia.

The Province, in collaboration with the oil and gas industry and local communities, has created a package of programs designed to improve industry and resident relations, building on the BC Energy Plan commitment to simplify processes, strengthen dispute resolution methods and offer support and access to information.

Living Together - Working Together

This voluntary community-based initiative helps to address local area concerns related to oil and gas activity such as traffic safety, speed control, dust, noise and roadway maintenance related to oil and gas activity. Several oil and gas companies operating in the Montney Play region of B.C. have made a public commitment to adhere to the Living Together - Working Together guiding principles and are listed on the related website at www.empr.gov.bc.ca/MACR/LivingTogetherWorkingTogether/Pages/default.aspx#top.

Procurement Offices

The ministry, along with industry and Energy Services BC, have partnered to establish two procurement help offices, one in Fort Nelson and the other in Dawson Creek that will help service sector companies navigate the complex procurement standards required by oil and gas companies. The offices act as liaison between oil and gas companies working in the area and local service sector companies.

Online Searchable Database

This free database lists B.C. service-sector businesses and is available to oil and gas companies searching for local procurement. It includes at least 75 per cent of all known B.C. service sector companies classified by location and industry standards.

The Petroleum Field Services Entrepreneur Training Program

A petroleum industry specific business training program that provides potential entrepreneurs with the skills to start their own business providing goods or services to oil, gas or pipeline companies operating in British Columbia.

The Professional Driver Training for Women Program

A pilot training program designed to tap into a non-traditional oil and gas industry labour source. Upon completion, participants receive their Class 1 Driver's licence with air brake endorsement, safety skills and certifications required by the industry and sufficient number of driving hours required to work as a professional driver. Nine participants have now successfully completed this program and have obtained their Class 1 licence.

Employment and Settlement Centre

S.U.C.C.E.S.S. Northern British Columbia Newcomers Integration Service Centre in Fort St. John works with oil and gas service sector employers recruiting for hard to fill jobs by tapping into another non-traditional oil and gas industry labour source - recent Canadians and immigrants. In addition to employment support, the centre provides community information and settlement support to newcomers re-locating to fill jobs in northeast B.C.

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 or 250 213-6934 (cell)
    www.gov.bc.ca