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Latest British Columbia Oil, Gas Rights Sale Sets Record

British Columbia's sale last week of oil and natural gas rights set new records and put the province on track to smash a previous annual sales high of C$1.2 billion, provincial authorities said.

The oil and gas rights sale brought the province C$441 million in bonus bids, bringing the fiscal year-to-date total for the province to more than C$480 million, said BC Energy, Mines and Petroleum Resources Minister Richard Neufeld.

"BC is committed to competitiveness," said Neufeld. "In just one sale we've set several new records. BC's resource potential isn't just promising, it's proven, and companies are getting remarkable results here."

The unprecedented average price per hectare of C$9,538 shattered the record of C$2,915/hectare set in December, said Neufeld. This month's sale also set a record-high average price for drilling licenses of C$10,990/hectare, which trumped April's record of C$3,638. Forty parcels covering 46,284 hectares were offered and sold in the latest sale.

"Our investments in infrastructure and innovative royalty programs have contributed to this success," Neufeld said. "The escalating productivity and value of the oil and gas sector signal a bright future for British Columbia."

Key parcels in the sale included three drilling licenses located in the Stewart Creek area, which is about 40 kilometers southwest of Fort St. John: one generated a bid of more than C$25,383/hectare,for a total of more than C$140 million and two generated bids of more than C$20,355/hectare for totals of more than C$102 million each. Another strong area for sales was a group of five parcels within the Horn River Basin northeast of Fort Nelson, which generated C$52.1 million at an average price of about $3,275/hectare. One 4,964-hectare parcel in this group brought an average price of more than C$5,000/hectare for a tender bonus of C$25.4 million.

Most of the bidding was by companies working for producers, and determining which companies actually will have the lease is difficult, the ministry said. Companies paying the most in the recent sale included Petroland Services (1986) Ltd., which paid C$140 million (C$25.4 million/hectare); Landsolutions Inc., which paid C$102.5 million (C$20.5 million/hectare); and Sandstone Land & Mineral Co. Ltd., which paid C$102.1 million (C$20.4 million/hectare).

Complete results of the May sale and additional statistics are posted on the BC energy website. The next lease sale in the province is scheduled for June 18 when 99 parcels covering 61,482 hectares will be offered.

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