In yet another example of the majors rebuilding gas holdings in North America, Shell Canada acquired a stake in 110,000 acres of land at the recent Crown land sales in Alberta and British Columbia.
Shell Canada CEO Clive Mather said with this deal the company has “more than tripled our basin-centered gas landholdings this year, providing us additional opportunity to grow our Western Canada gas production.”
Among the assets acquired last week were 66,400 acres with unconventional gas resources in the deep basin area near Hinton, AB. In total, Shell Canada acquired a 100% interest in seven parcels for a total price of $99 million. These lands are additional to 58,000 acres acquired in the deep basin of northeastern British Columbia in June 2005.
“During 2005 we have invested more than $350 million in additional land to support our growth aspirations,” said Mather.
At the Dec. 14th sale, the company also acquired an interest in 20,000 acres in the northeastern B.C. foothills offering conventional gas exploration prospects in Triassic, Permian and other deep structures.
The company’s investment in oilsands continued with the acquisition of additional leases with mining potential in the Athabasca area. Three leases were acquired with a combined area of 22,800 acres for a total price of $86 million. These lands are additional to four other leases with a combined area of 45,900 acres acquired in the third quarter of this year. The company has increased its landholdings in Athabasca by more than 50% during 2005.
“While drilling will be needed to confirm the resource potential, we expect these lands will provide additional support to the continued, long-term growth of our oilsands business,” said Mather.
The company also recently purchased 12 quarter sections of private land adjacent to its Scotford complex near Fort Saskatchewan to accommodate future additions of upgrading capacity.
With natural gas prices soaring this year, Producers operating in Canada were extremely active buyers. Alberta netted a record C$2.3 billion (US$2 billion) on oil and gas rights in 2005, including a single-sale record of C$544 million (US$462 million) for 1,890 square miles of drilling targets in this latest sale, prompting forecasts that field activity will stay strong potentially for years to come. B.C. chalked up its second best year for Crown petroleum and natural gas rights sales. The province netted C$534.2 million (US$454 million) for 2005 by auctioning off 2,318 square miles of drilling targets (see Daily GPI, Dec. 19).
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