Oil and Gas
Alberta bumped to third in energy hunt; B.C., Saskatchewan now both higher in value of claims
Source: David Ebner, The Globe and Mail, Friday, August 15, 2008
British Columbia and Saskatchewan raked in a combined haul of $745-million in land rights yesterday, strengthening their claims as the hottest exploration zones in the country and edging Alberta into third place.
While Alberta, anchored by the oil sands, remains Canada`s energy king, the province is being left behind as companies race to open new oil and natural gas frontiers. For the first time, it looks like Alberta will not take in the most money this year for new exploration rights and may actually finish third behind Saskatchewan.
For B.C. and Saskatchewan, the boom is very much like what happened in Alberta in 2006, when the province took in an astounding $3.43-billion, with more than half coming from the sale of exploration rights in the oil sands.
But especially in the oil sands, Alberta is old news for explorers looking to buy up rights.
All the best land is taken, as well as many of the middling plots and a lot of the fringe areas, too.
For natural gas, B.C. is where every big and small energy company wants to be. EnCana Corp., which was active in the most recent auction, said it could produce two billion cubic feet a day of gas from Montney and Horn River, the two hot B.C. plays. That would be an amount equal to two-thirds of B.C.`s current output and one-eighth of Canada`s total, which now comes mostly from Alberta.
"B.C.`s production, unlike Alberta, is going to be growing at a good pace over the next few years," said Mike Graham, an executive vice-president at Calgary-based EnCana. "It`s big. It`s big for EnCana. And it`s big for B.C."
B.C. yesterday announced a $502-million take, its second-biggest auction of exploration rights ever, behind last month`s record $610-million. This year`s total, after just eight months, is $2.08-billion, swelling provincial coffers and already double last year`s record.
This modern gold rush comes as energy - led by natural gas and coal - has just become B.C.`s leading export, taking over from forestry, which is in severe recession.
Saskatchewan said it attracted $243-million in bids, also its second-biggest auction. Its four sales this year have been its biggest to date, and Saskatchewan is now at $848-million, more than triple its record, set last year.
For Alberta, the government`s plan to raise royalties on oil, natural gas and oil sands has angered explorers and compounded the slowdown in new exploration.
Yesterday, B.C. and Saskatchewan both said company-friendly policies were drawing exploration to their provinces.
But the real driver is opportunity, starting with the high price of oil and natural gas, the size of the fields - gas in B.C. and oil in Saskatchewan - and the new technology to unlock it.
The gas in B.C. and the oil in Saskatchewan is trapped in barely porous rock formations, which means it is difficult to get the commodities to flow.
That`s all changed with major advances in drilling techniques and what is called multistage fracturing - where millions of litres of fluid is pumped at high pressure down a well bore and along a multikilometre horizontal leg, creating multiple explosions in the geology at set points to get gas or oil to come shooting to the surface.
"We are really in a technological revolution," said Dale Shwed, chief executive officer of Crew Energy Inc., a junior explorer with a position in northeastern B.C.
Indications suggest the action to stake a claim isn`t over, in B.C. or Saskatchewan, with upcoming assessments expected to further boost the outlook for the fields` total potential.
"There`s no question that the resource plays in Saskatchewan and British Columbia are big widespread stuff. And I hear it`s even bigger than we think," said Steve Hager, exploration analyst at consultancy Canadian Discovery Ltd. in Calgary.
Alberta bumped to third in energy hunt; B.C., Saskatchewan now both higher in value of claims
Source: David Ebner, The Globe and Mail, Friday, August 15, 2008
British Columbia and Saskatchewan raked in a combined haul of $745-million in land rights yesterday, strengthening their claims as the hottest exploration zones in the country and edging Alberta into third place.
While Alberta, anchored by the oil sands, remains Canada`s energy king, the province is being left behind as companies race to open new oil and natural gas frontiers. For the first time, it looks like Alberta will not take in the most money this year for new exploration rights and may actually finish third behind Saskatchewan.
For B.C. and Saskatchewan, the boom is very much like what happened in Alberta in 2006, when the province took in an astounding $3.43-billion, with more than half coming from the sale of exploration rights in the oil sands.
But especially in the oil sands, Alberta is old news for explorers looking to buy up rights.
All the best land is taken, as well as many of the middling plots and a lot of the fringe areas, too.
For natural gas, B.C. is where every big and small energy company wants to be. EnCana Corp., which was active in the most recent auction, said it could produce two billion cubic feet a day of gas from Montney and Horn River, the two hot B.C. plays. That would be an amount equal to two-thirds of B.C.`s current output and one-eighth of Canada`s total, which now comes mostly from Alberta.
"B.C.`s production, unlike Alberta, is going to be growing at a good pace over the next few years," said Mike Graham, an executive vice-president at Calgary-based EnCana. "It`s big. It`s big for EnCana. And it`s big for B.C."
B.C. yesterday announced a $502-million take, its second-biggest auction of exploration rights ever, behind last month`s record $610-million. This year`s total, after just eight months, is $2.08-billion, swelling provincial coffers and already double last year`s record.
This modern gold rush comes as energy - led by natural gas and coal - has just become B.C.`s leading export, taking over from forestry, which is in severe recession.
Saskatchewan said it attracted $243-million in bids, also its second-biggest auction. Its four sales this year have been its biggest to date, and Saskatchewan is now at $848-million, more than triple its record, set last year.
For Alberta, the government`s plan to raise royalties on oil, natural gas and oil sands has angered explorers and compounded the slowdown in new exploration.
Yesterday, B.C. and Saskatchewan both said company-friendly policies were drawing exploration to their provinces.
But the real driver is opportunity, starting with the high price of oil and natural gas, the size of the fields - gas in B.C. and oil in Saskatchewan - and the new technology to unlock it.
The gas in B.C. and the oil in Saskatchewan is trapped in barely porous rock formations, which means it is difficult to get the commodities to flow.
That`s all changed with major advances in drilling techniques and what is called multistage fracturing - where millions of litres of fluid is pumped at high pressure down a well bore and along a multikilometre horizontal leg, creating multiple explosions in the geology at set points to get gas or oil to come shooting to the surface.
"We are really in a technological revolution," said Dale Shwed, chief executive officer of Crew Energy Inc., a junior explorer with a position in northeastern B.C.
Indications suggest the action to stake a claim isn`t over, in B.C. or Saskatchewan, with upcoming assessments expected to further boost the outlook for the fields` total potential.
"There`s no question that the resource plays in Saskatchewan and British Columbia are big widespread stuff. And I hear it`s even bigger than we think," said Steve Hager, exploration analyst at consultancy Canadian Discovery Ltd. in Calgary.