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HomeNewsLeases near Lloydminster contribute nearly $3 million in public offering

Leases near Lloydminster contribute nearly $3 million in public offering

Oil leases in the Lloydminster area contributed nearly $3 million to Saskatchewan’s public offerings this month. The latest public offering of Crown petroleum and natural gas rights held Tuesday, June 4, generated more than $6 million in revenue for the province of Saskatchewan, bringing the current fiscal year’s total to about $8 million.

Six leases posted north of St. Walburg in the Lloydminster area were acquired for a total of $2,881,280.38. These parcels are prospective for heavy oil in the Mannville Group and were acquired by Millennium Land (111) Ltd., Millennium Land (333) Ltd., Millennium Land (555) Ltd., BASM Land & Resources Ltd., Rockwell Resources Inc. and Prairie Land & Investment Services Ltd.

Paul Mahnic, executive director of the Ministry of Energy and Resources land and mineral tenure branch, believes there’s a high value on this parcel of land. He thinks this can indicate a sense of competition among industry bidders.

“Industry will determine what they think a minimum bid is based on the economics of the project, and they’ll look at the competition, and say ‘we need to add a premium’ if they think somebody else will be interested, or multiple parties. That’ll push the bonus bid higher,” says Mahnic.

Mahnic adds that the offering experienced a good average. The average price per hectare for the June offering was $1,654 per hectare, the highest per hectare for an offering since August 2014. He also believes it’s a sign of confidence in the province’s royalty regimes, tenure regimes, and the industry in general.

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“It’s all positive indicators that there is still interest. In these areas, where you’re looking at heavy oil, they’re typically longer-term projects. They’re not just looking to get in and get out in the next year or two.”

Mahnic believes they could indicate a twenty or thirty-year project in the area. The scheduled date for the next public offering will be August 13.

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