Northeastern B.C. is a hot spot for natural gas exploration. Companies are willing to pay record amounts to drill in this area.
Spurred by big unconventional gas discoveries, British Columbia on Thursday posted its largest land sale ever, collecting $441.65 million from the auction of petroleum and natural gas rights….
The key parcels in the sale were three drilling licences at Stewart Creek, 40 kilometres southwest of Fort St. John, in the province’s northeast. One generated a bid of $140 million — which could make it the most expensive parcel ever sold in Western Canada — and two others fetched bids of over $102 million each.
Five additional parcels in the Horn River basin 95 kilometres northeast of Fort Nelson generated $52.1 million in bonus bids.
The per-hectare price of $20,000 to $25,000 is about five times the regular going rate of $5,000 per hectare.
Land sale interest has been picking up since American independents EOG Resources Inc. and Apache Corp. boasted of finding trillions of cubic feet of gas trapped in shale rocks in the Horn River area. Further south, companies such as Duvernay Oil Corp. have been chasing so-called "tight" gas in a geologic zone called the Montney formation.
B.C. stands to gain significant royalties when the natural gas is sold. On the other hand, the B.C. carbon tax is poised to discourage the use of natural gas. Many jurisdictions welcome the use of natural gas in their quest to live in a cleaner environment.