LAND SALE BRINGS IN $6.3 MILLION IN REVENUE

The latest sale of Crown petroleum and natural gas rights has brought in $6.3 million in revenue for the province, capping a record-breaking $928 million 2008-09 fiscal year for land sale revenue. This amounts to more than twice as much as the figure for the previous fiscal year. The 2008 calendar year total was $1.12 billion, also a record.

"The lower results for the February land sale are not entirely unexpected," Energy and Resources Minister Bill Boyd said. "The 75 per cent drop in the spot price of oil in the last seven months is a major contributing factor, along with the now much tighter financial markets in which energy companies are operating. We are not alone here, and see those new global market conditions reflected in recent lower land sale results in Alberta and British Columbia.

"That said, we continue to have solid grounds for optimism. We are coming off a record 2008 calendar year for land sales, and the two-year exploration licences that many companies bought should result in a shift from land acquisition to drilling and exploration as those companies move to maximize return on their investments. As well, companies investing in our province are aware that attractive oil and gas plays like the Bakken and Lower Shaunavon are like ‘money in the bank' to them over the medium and long term."

February's sale included two petroleum and natural gas exploration licences that sold for $339,000 and 144 lease parcels that attracted $5.9 million in bonus bids.

The Lloydminster area led the land sale with bonus bids of $3.1 million. The Weyburn-Estevan area was next at $2.2 million, followed by the Kindersley-Kerrobert area at $520,000 and the Swift Current area at $503,000.

The highest price paid for a single parcel was $411,000. Sandstone Land & Mineral Company Ltd. acquired this 65-hectare lease in an oil pool 35 kilometres northeast of Lloydminster.

On a per hectare basis, the highest price paid was $6,889. Prairie Land & Investment Services Ltd. bid over $111,000 for a shallow rights lease of a 16-hectare parcel above the Bakken Formation, 16 kilometres east of Redvers.

The next sale of Crown petroleum and natural gas rights will be April 6, 2009.

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For more information, contact:

Ed Dancsok
Energy and Resources
Regina
Phone: 306-787-2591
Email: ed.dancsok@gov.sk.ca