Saskatchewan land sales leave Alberta in the dust
No, it's not because of the increased royalty rate, says drillers association
Calgary Herald; Canwest News Service
Friday, June 13, 2008
CALGARY - Saskatchewan continues to set new records for land buying after it racked up the third-largest land sale in its history Thursday, while Alberta recorded one of its lowest.
Saskatchewan's June land sale raised $142.5 million while a similar auction in neighbouring Alberta brought in $20.25 million.
Saskatchewan's year-to-date revenue figure for 2008 now stands at $605.4 million, shattering the previous single-year record of $250.3 million set last year. It was also the third-consecutive sale in excess of $100 million, something that has never happened before in Saskatchewan.
The numbers contrast with $415 million raised thus far in Alberta, down sharply from $705 million in 2007 when oil and natural gas prices were half of what they are today.
Driving the interest in Saskatchewan is a light oil discovery called the Bakken play, which the Canadian Society of Petroleum Geologists (CSPG) says holds 100 billion barrels in Canada.
The United States Geological Survey (USGS) estimates an additional 400 billion barrels are south of the border, which is larger than the proven reserves of Saudi Arabia.
Nancy Malone, the Canadian Association of Oilwell Drilling Contractors' economic analyst, said the Alberta government's decision to jack up royalty rates is only one factor in the exodus of land dollars out of Alberta into neighbouring provinces like Saskatchewan and British Columbia.
"Until we find something new in Alberta, everybody is going where the opportunity is," she said.
Saskatchewan's sale was also noteworthy for the highest price paid for a single parcel at just under $39 million. Standard Land Company Inc. purchased the 9,094-hectare exploration licence located south of Lake Alma, near the Canada-United States border, making it the highest price ever paid for a single plot in the province's history.
© The Edmonton Journal 2008
