Canada News Update....
Alberta energy land sales top $1-billion
By DAVE EBNER
UPDATED AT 9:28 PM EST Friday, Dec 17, 2004
CALGARY -- Alberta cracked the $1-billion mark yesterday in land sales for oil and natural gas exploration, pushing the annual tally close to a record as the industry feverishly hunts for hits amid high energy prices and a renewed belief that there are more major finds left in the province.
"It's making for a very robust year," said Pierre Alvarez, president of the Canadian Association of Petroleum Producers.
Land sales in Alberta reached $1.11-billion this year, buoyed past the billion-dollar mark by a sales of $109-million announced yesterday. It was the last sale of the year. The 2004 tally stands just slightly behind 1997's record $1.15-billion and 2000's $1.14-billion.
Alberta generally holds two land sales a month and companies bid for subsurface mineral rights on Crown land. The money goes to the province, accounting for about 3.5 per cent of its total revenue.
Alberta first topped $1-billion in 1980, near the end of a boom that roared through the 1970s, and didn't reach the mark again until 1994. On a per-hectare basis, particularly for conventional exploration beyond the oil sands, prices are up more than 25 per cent from last year and this year is the hottest it's been in the province since the early 1980s.
A number of factors are at play, in particular the widespread belief in the oil patch that lofty commodity prices will last for at least two more years. New technology, from drilling to seismic mapping, is helping, too, and underpins recent big discoveries by Talisman Energy Inc. in the British Columbia Foothills and Shell Canada Ltd.'s in the Foothills northwest of Calgary.
"It seems like this cycle has legs," said Gregg Scott, president of Scott Land & Lease Ltd., the leading third-party firm that bids on behalf of others. "It helps the industry when you can still find a world-class discovery an hour-and-a-half drive from Calgary. It wasn't offshore. It wasn't in the Arctic. When you can still do that in 2004, it gives investors more confidence in our industry."
The booming energy market has seen cash flood Calgary. The S&P/TSX energy index reached a record high close in late November, money for upstart public juniors is flowing strongly and millions are being put to private explorers as well.
And everybody's in the game, (go STUOF) Mr. Scott said, an "A-to-Z list . . . the usual big companies and everything in between."
The biggest buys yesterday were made in the Pembina Nisku area west of Edmonton, which FirstEnergy Capital Corp. analyst Cody Kwong described in a late November report as "one of the hottest plays" in the Western Canada Sedimentary Basin. For one section, $5.6-million was paid, working out to $21,889 per hectare. A smaller parcel in the same area fetched $1.3-million or $20,886 per hectare. Such per-hectare figures are almost unheard of, Mr. Scott said.
AI
