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British Columbia Sets Land Sale Record on Natural-Gas Project

Bloomberg

 

 

British Columbia Sets Land Sale Record on Natural-Gas Project 

By Ian McKinnon

July 17 (Bloomberg) — British Columbia collected a record C$610.7 million ($609.6 million) from the sale of oil and natural-gas drilling rights, boosted by interest in a project that may contain trillions of cubic feet of gas reserves.

Land containing drilling rights to the Montney formation boosted government sales this year to more than $1.3 billion, shattering the previous annual record of C$1.05 billion set in 2007, according to an e-mailed statement today.

Five Montney concessions near Dawson Creek in the province’s northeastern corner accounted for C$482.6 million of the total, the statement said. Companies buying drilling rights can use agents to conceal their identity.

New technology and higher energy prices are prompting companies such asEnCana Corp., Canada’s largest gas producer, to drill wells in Montney. The formation may hold trillions of cubic feet of reserves, according to estimates by brokerages including FirstEnergy Capital Corp. of Calgary.

Royal Dutch Shell Plc, Europe’s biggest oil company, agreed on July 14 to acquire Duvernay Oil Corp. for about C$5.27 billion partly to gain access to the Calgary-based company’s Montney drilling prospects.

Shell offered a 42 percent premium for Duvernay, which has more than 500 Montney drilling prospects that could contain more than 1 trillion cubic feet of reserves, according to the Canadian company’s annual report.

Climbing demand for the home-heating and power-generation fuel contributed to natural-gas futures traded in New York advancing about 43 percent this year.

To contact the reporter on this story: Ian McKinnon in Calgary at[email protected].

Last Updated: July 17, 2008 13:23 EDT

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