Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (107196)	8/15/2008 5:28:29 PM
From: LoneClone	Read Replies (1) \| Respond to of 206322

Drilling auction brings B.C. new record Natural gas industry booms here, but on decline in Alberta Derrick Penner, Vancouver Sun Published: Thursday, August 14, 2008 canada.com Gas drillers set year-to-date records in August with their bids to secure land positions in the Western Horn River basin in B.C.'s far northeast. Exploration companies paid $321.4 million for six drilling licences in the basin, some 80 kilometres north of Fort Nelson, which was the lion's share of the $501 million total that companies bid in the August auction. It was the second-highest total for one month, down from $610 million paid in July's auction. But it brings total drilling-rights revenue to a record $1.8 billion since the start of the province's fiscal year in April and $2 billion since January. Richard Neufeld, minister of energy, mines and petroleum resources, noted that exploration companies paid $1.2 billion in all of 2007. They "have drilled in those areas for a number of years previously and have hit some pretty good prospects for shale gas," Neufeld said. "That's what they're searching for." Drillers are beating a path to the Western Horn River basin as companies report promising finds there. As well, the B.C. government has adjusted its royalty system to give producers a break on more-expensive-to-extract shale gas. The amount of money being paid for B.C. rights is "incredible," said Steve Hager, senior exploration analyst at Canadian Discovery Ltd. The success of the Western Horn River basin is helping to accelerate an exodus of exploration from Alberta, where, starting in January, the government is charging higher royalties, Hager said. The result is that Alberta's land sales have plummeted to $744 million so far this year, trailing Saskatchewan, which is $848-million richer so far in 2008 from its oil and gas rights sales, and the $2 billion paid in B.C. since January. "It's money [B.C. was] never expecting a few years ago. Of course, they are siphoning this up-front cash away from Alberta, just like Saskatchewan is." However, Neufeld said he doubted changing royalties in Alberta have played as much of a role in the dramatic increase in exploration in northeast B.C. He said companies' success in finding gas in B.C. and this provinces's royalty changes were making a difference. "We have the gas," Neufeld said. "Alberta's [known reserves] are on the decline, and British Columbia's are on the incline." The bidders for the six Western Horn River Basin leases paid between $9,200 and $13,000 per hectare - but those were not the highest prices paid in the auction, according to a news release from Neufeld's ministry. Overall, the August sale of drilling rights saw bidders purchase exclusive exploration rights to 131 of 139 parcels covering 17,335 hectares in northeast B.C. for an average price of $4,359 per hectare. However, bidders paid more than $25,000 per hectare, for a total of $25.8 million, for one drilling licence in the Groundbirch area 45 kilometres west of Dawson Creek. Auctions are based on requests of companies that are exploring in the region and intend to take part in the bidding. The next auction, scheduled for Sept. 10, will offer 105 leases covering 92,973 hectares. News from the region has been marked by big finds and major firms jockeying to secure reserves from its fields. Earlier this year, exploration firms Nexen Inc., EOG and EnCana Corp., in partnership with Houston-base Apache Corp., all announced significant gas finds with the potential to add large amounts of natural gas to known Canadian reserves. In July, Royal Dutch Shell PLC bid $5.9 billion to buy Duvernay Oil Corp., which holds drilling rights in a large portion of the Montney field, another northeast gas field that has attracted attention. With files from Canwest News Service