Oil and gas rights sales in Saskatchewan more profitable this year: government

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Oil and gas rights sales in Saskatchewan more profitable this year: government

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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