Following October’s public offering of Crown petroleum and natural gas rights in Saskatchewan, Synergy Land Services Ltd. bid for a lease located southeast of Lloydminster.
The 259 hectare lease went for just over $575,000 and is prospective for heavy oil in the Mannville Group.
“You can see in the area there’s a lot of horizontal drilling, it’s a heavy oil area so it’s a fairly intensive capital investment but the fact that they were able to spend that much on the land sale bonuses, it was quite promising for that area,” says Paul Mahnic, the Executive Director of Lands and Minerals Tenure Branch.
He adds, “this may not translate to a huge jump in drilling but it just shows the economics are still working for industry. Even for a smaller parcel, this is basically a one section block, there’s still the opportunity to make a bit of money.”
The is public offering generated $19 million in revenue, bringing the current revenue for the 2017-18 fiscal year to $51 million, surpassing last year’s final total of $50 million.
Mahnic says, “it just speaks to the tenure regime, the royalty regime and our whole regulatory set up, that it’s competitive nationally and internationally as well. In that sense, capital, they can spend it anywhere in the world, so the fact that they are willing to still invest in Saskatchewan is definitely promising.”
The next public offering of petroleum and natural gas rights will be held on December 5.