An oilfield pumpjack, owned by PrimeWest Energy, at work amidst blooming fields of canola.Larry MacDougal
A sudden surge in interest in Alberta's natural gas helped drive record-setting prices at the province's Wednesday petroleum land sale.
Companies paid an average of $2,084.86 per hectare - the highest amount ever paid on average for Alberta land, exceeding prices seen even in the halcyon days of 2005 and 2006.
The total sale brought in $451-million, the second highest overall tally in provincial history, and just less than a $475-million sale in December, 2005. The sale comes after another blockbuster sale in British Columbia, which saw that province net $404-million from companies chasing shale gas plays two weeks ago, and substantially boosts Alberta's take for 2010, which before Wednesday had stood at $837-million.
"It's certainly very encouraging," said Christine King, a spokeswoman with Alberta Energy.
In Alberta's best-ever year, 2005, it brought in $1.8-billion; last year it managed only $731-million.
Surprisingly, a big chunk of the most recent sales total came from three parcels of land southwest of Fox Creek, in a region dominated by natural gas production, that sold for more than $63.5-million each. The far stronger price of oil in recent months has led many companies to flee natural gas, but the land sale could indicate a shift is underway, based on expectations of a natural gas recovery.
Land sales are "usually reflective of what people's views of future oil or gas prices are going to be," said Brad Turner, president of Calgary-based Britt Land Services. "This is the first indication that people are seeing they can earn positive returns from the money they're going to invest."
Nathan VanderKlippe