LAND SALES ON RECORD PACE

Sales of Crown petroleum and natural gas rights are on a record pace in 2007, thanks to the continuing boom in our oil and gas industry and the first-ever public offering of oil sands rights.

August's land sale generated $38.2 million in revenue for the province, bringing accumulated revenue to $151.1 million since the start of the year. With two sales to go, 2007 is already the fourth best year on record.

"These excellent results are the latest indicator of the oil and gas industry's confidence in Saskatchewan's growing economy," Government Relations Minister Harry Van Mulligen said on behalf of Industry and Resources Minister Maynard Sonntag. "This historic sale also heralds the beginning of a potential new oil sands industry in Saskatchewan."

This month's sale included 12 exploration licences that sold for $14.5 million and 257 lease parcels that brought in $20.4 million. Sales of the new oil sands dispositions included six oil sands exploration licences that attracted $3.3 million in bonus bids.

In addition to the parcels sold for bonus bids, two special exploratory permits were awarded on the basis of work commitments. One permit, covering over 198,000 hectares and located 80 kilometres north of Yorkton, was awarded to Saskatoon Assets Inc. with a work commitment of $4.1 million over the next two years. The other permit, located 65 km north of Regina, received a commitment from Whitland Consulting Inc. of almost $900,000 for work on 97,000 hectares.

Another provincial first in the August sale was the awarding of oil shale exploration permits under the competitive work commitment process. Two permits were issued, both in the Hudson Bay area. One was issued to Noble Hydrocarbons Alta Ltd. with a commitment to spend over $1 million on 38,000 hectares. The other was awarded to Cavalier Land Ltd. on the basis of a commitment to spend over $300,000 in exploration on 34,000 hectares.

The Weyburn-Estevan area received the most bonus bid activity with sales totalling $27.7 million on the strength of continued interest in deeper oil targets. The Lloydminster area with the interest in oil sands was next at $5.3 million, followed by the Swift Current area at $3.8 million and the Kindersley-Kerrobert area at $1.5 million.

The highest price received for a single parcel was $5.1 million. McCrank Stewart Johnson purchased this 36-section exploration licence located 58 km south of Weyburn.

The highest price paid for an oil sands parcel came from Petroland Services (1986) Ltd., with a bid of more than $1 million or $108 per hectare for a 36-section oil sands exploration licence located north of the Clearwater River in northwest Saskatchewan.

The highest overall price paid per hectare was $9,271. Scott Land & Lease Ltd. purchased a 32-hectare lease parcel in the Cactus Lake heavy oil region of west central Saskatchewan for over $300,000.

The next Crown land sale will take place on Monday, October 1, 2007.

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For more information, contact:

Bob Ellis
Industry and Resources
Regina
Phone: 306-787-1691