Government of British Columbia

Government of British Columbia

March 26, 2009 13:43 ET

Government of British Columbia: Oil and Gas Produce Record-Breaking Fiscal Year

VICTORIA, BRITISH COLUMBIA--(Marketwire - March 26, 2009) -

NEWS RELEASE

For Immediate Release

2009EMPR0020-000532

March 26, 2009

Ministry of Energy, Mines and Petroleum Resources

OIL AND GAS PRODUCE RECORD-BREAKING FISCAL YEAR

VICTORIA - The March 25, 2009 oil and gas land rights sale of $15 million in bonus bids closed out the 2008-09 fiscal year with an all-time high of $2.4 billion, more than double last year's record-setting pace, Energy, Mines and Petroleum Resources Minister Blair Lekstrom announced today.

"The records shattered by the 2008-09 oil and gas land rights sales underscore the unprecedented growth of the B.C. energy sector," said Lekstrom. "Investors recognize the oil and gas resource potential in B.C. evidenced by records like an incredible $33,649 per-hectare bid for a drilling licence. Projects such as the $187-million Sierra Yoyo Desan road upgrade and our royalty program incentives make B.C. a very attractive place to invest in oil and gas."

The $2.4-billion 2008-09 fiscal year total trumped the previous record-breaking year by $1.2 billion, and broke every tracked record for oil and gas land rights sales in B.C. This is in addition to the record-setting 2008 calendar year total of $2.66 billion.

Two significant northeastern geological areas accounted for an amazing 80 per cent of the 2008-09 sales, with 190 land parcels totalling 247,227 hectares being sold. The Horn River Basin, renowned for shale gas, and the Montney Shale Formation, known for its petroleum and natural gas plays, contributed over $1.9 billion collectively.

The March 25 sale offered 33 parcels in northeast B.C. covering 13,594 hectares, and sold 27 parcels covering 12,054 hectares. The average price per hectare was $1,246.

Key parcels in the sale included:

- One lease bid within the Montney of approximately $5,000 per hectare for a total of almost $1.3 million located in the Groundbirch area approximately 32 km west of Dawson Creek.

- Three lease bids of between $5,300 and $14,300 per hectare for a total of over $8 million located in the Sukunka area, approximately 40 km south of Chetwynd.

- One drilling licence with bids over $2.7 million located northwest of the Groundbirch field, approximately 60 km northwest of Dawson Creek.

The first sale for the 2009-10 fiscal is scheduled for April 22, 2009 and will offer 24 parcels covering 29,009 hectares.

Industry investment for 2008 is estimated at $8 billion, almost three times the investment in 2001. Royalty programs, specifically the Summer Drilling Royalty and the Infrastructure Royalty Credit programs, are seeing excellent returns contributing to a 200 per cent increase in summer drilling activities over 2002.

B.C. is the only significant jurisdiction in Canada and only one of two in North America that has seen oil and gas rig activity in January and February 2009 increase over the same period in 2008.

"The Province's oil and gas programs are stimulating investment, creating jobs and opening up opportunities in rural British Columbia," said Lekstrom. "Recent announcements for training opportunities, landowner initiatives and our developing service sector, demonstrate the Province's continued commitment towards making B.C. the best place to invest in oil and gas and our future."

Complete results of the sale and additional statistics are posted on the Ministry of Energy, Mines and Petroleum Resources website: www.em.gov.bc.ca/Subwebs/Landsale/results/default.htm

1 backgrounder attached.

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

2009EMPR0020-000532

March 26, 2009

Ministry of Energy, Mines and Petroleum Resources

2008-09 FISCAL - $2.4 BILLION BREAKS RECORDS

B.C.'s abundant oil and gas attracted record land rights sales in 2008-09. Every record tracked for sales statistics was broken in the 2008-09 fiscal year.

Key records broken by 2008-09 fiscal year oil and gas rights sale and other highlights



Item: Fiscal year total
New Record/Highlight: $2.4 billion -2008-09 (Final Fiscal Total)
Old Record: $1.2 billion - 2007/08

Item: Highest monthly land rights sale
New Record/Highlight: $610 million - July 2008
Old Record:
$441 million - May 2008
$417.98 million - September 2003

Item: Highest average price for an individual parcel (drilling licence)
New Record/Highlight: $33,649/hectare - July 2008
Old Record: $25,384/hectare - May 2008

Item: Highest average price for a lease parcel
New Record/Highlight: $24,690/hectare - July 2008
Old Record: $22,305/hectare (lease) - August 1980

Item: Price/hectare overall average price for fiscal year
New Record/Highlight: $3,710.09/hectare
Old Record: $1,863.56/ha 2007-08

Item: Highest overall average price for an individual sale
New Record/Highlight: $9,537.70/hectare - May 2008
Old Record: $2,915.35/ha - Dec. 2007

Item: Highest tender bonus paid for an individual parcel in a fiscal
New Record/Highlight: $156 million - July 2008
Old Record: $102 million Dec. 2007

Eight of the top 20 all-time highest land rights sales occurred in
2008-09 fiscal year

Placement in all-time history: First
Amount: $610.1 million
Date: July 2008

Placement in all-time history: Second
Amount: $501.7 million
Date: August 2008

Placement in all-time history: Third
Amount: $441.4 million
Date: May 2008

Placement in all-time history: Seventh
Amount: $220.7 million
Date: September 2008

Placement in all-time history: Eighth
Amount: $213.2 million
Date: June 2008

Placement in all-time history: Tenth
Amount: $151.5 million
Date: October 2008

Placement in all-time history: Fifteenth
Amount: $114.9 million
Date: November 2008

Placement in all-time history: Nineteenth
Amount: $91.7 million
Date: December 2008


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 Cell: (250) 213-6934
    Website: www.gov.bc.ca