Marquee Energy Ltd. (fka MQXDF)

[Enterprising Investor]

Alberta may cancel leases of some oil sand companies (7/26/13)

Alberta just made 10 oil sands companies victims of their own industry's success.

Production has been growing so rapidly that Fort McMurray, the oil sands boom town located in the heart of northern Alberta's bitumen reserves, is starting to burst at the seams. About 75,000 people live there today, but by the time Britain's youngest prince graduates from high school (around 2030, assuming ole' George isn't held back) that figure is expected to more than double to 160,000.

The government responded Thursday by sectioning off 55,000 acres that surround what is currently Fort McMurray (more than double the city's current landmass) as an Urban Development Sub Region (UDSR) earmarked for future development. Over the next 20 years, the Regional Municipality of Wood Buffalo will gradually buy the land from the province.

The trouble is, Alberta has already leased out that land in 32 pieces to 10 companies looking to develop oil sands projects. Those leases "will be cancelled, effectively immediately," Ken Hughes, Alberta's Energy Minister, told reporters on Thursday evening. Officials declined to immediately identify the companies being stripped of their leaseholder status, but a combination of government and industry sources have confirmed to BNN that the list provided below is accurate.

Only the first two - Value Creation Inc. and Alberta Oil Sands Inc. - have developed their holdings to any material extent (Alberta Oil Sands is in the process of building out a project called 'Clearwater' underneath the Fort McMurray airport). The rest have been more or less just sitting on the land and the government has pledged to pay out all 10 lease losers, which they are legally obligated to do under Alberta's Mineral Rights Compensation Regulation and Public Lands Act, though not all of them may yet know what they've lost.

"Government staff are meeting with energy industry representatives in Calgary today and tomorrow to walk them through this plan," Hughes said.

"They were aware they had leases that could be part of the UDSR. We expect they will be supportive."

LIST OF BROKEN LEASEES
1. Value Creation Inc.
2. Alberta Oil Sands Inc.
3. Cenovus Energy Inc.
4. Cavalier Land Ltd.
5. E-T Energy Ltd.
6. Grizzly Oil Sands ULC
7. Koch Oil Sands Operating ULC
8. Laricina Energy Ltd.
9. Scott Land and Lease Ltd.
10. Suncor Energy Inc.

http://www.bnn.ca/Blogs/2013/7/26/Alberta-may-cancel-leases-of-some-oil-sand-companies-.aspx