Oil and Gas Rights sale brings in $7 million

The Jan. 14, 2009 sale of oil and gas land rights in British Columbia generated $7.1 million in bonus bids, bringing the record fiscal year to over $2.39 billion.

Eighteen parcels covering 11,938 hectares in B.C. were offered, and bids were accepted on 17 parcels covering 10,280 hectares for an average price of $690 per hectare.

The key parcels in the sale included:

· A drilling licence located approximately 42 kilometres southeast of Tumbler Ridge, partially within the Ojay gas field, with a bid of $1,129 per hectare for a total of over $3 million in tender bonus.

· A drilling licence located approximately 65 kilometres north of Hudson’s Hope, near the Townsend gas field, with the highest average price for a parcel of $1,466 per hectare, for a total bonus bid of $2.1 million.

· Two leases, which averaged $551 per hectare and received a combined $323,631 in tender bonus, located 40 kilometres southwest of Dawson Creek, within the Sundown gas field.

Drilling licences provide the exclusive right to explore for petroleum and natural gas by drilling wells; they are acquired by the successful bidder at the Crown sale; primary terms of three, four or five years depending on location.

Leases provide the exclusive right to produce petroleum and natural gas; they are acquired by the successful bidder at the Crown sale, or selected from permits and drilling licences. Primary terms are five or 10 years depending on location.

The next sale is scheduled for Feb. 25, 2009 and will offer 98 parcels covering 32,639 hectares.