It was less than half the July and August sales, but yesterday’s sale of oil and gas rights in Northeast BC still reached more than 220 million dollars.
That just builds on what were already record-setting fiscal and calendar year totals, now both over $2 billion. Ninety-four of the 105 parcels offered this month were purchased, covering more than 80,000 hectares, with an average price per hectare of more than $2,700. One of two drilling licences sold, about 15 kilometres east of Chetwynd, topped out at better than $12,000 per hectare, and the pair totalled over $26 million. In addition, three licences in the western Horn River Basin, north of Fort Nelson totalled almost $98 million, with one bid topping $14,000 per hectare.
This is the fifth consecutive monthly sale to produce more than $200 million in bonus bids. However, a new Oilweek article puts a damper on recent natural gas investment euphoria. It notes the recent decline in energy prices may force natural gas drillers to rethink plans for increasing Western Canadian drilling activity this winter. After surging to over $13 U.S. in July, a thousand cubic feet of natural gas is again trading for less than $8. The Petroleum Services Association of Canada, in late July, forecast 16,500 wells would be drilled nationwide this year.
That was still about 2,000 ahead of last fall’s forecast for 2008, but it was also about 2,000 less than the number drilled last year.