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Energy & Mines

June 2018

BC Land Sales

Alberta Land Sales

Long Lake Southwest Expansion

Rig Release Counts

Permitting Rises


BC Land Sales

Landsolutions GP Inc. has picked up a 1,847-hectare drilling license in B.C.’s June land sale for $42.05 million.

The parcel, produced a per-hectare price of $22,767.84.

Overall, the June sale brought in $42.08 million on the sale of 2,375 hectares ($17,715.85/ha).

For the year-to-date, B.C. sales are now at $59.44 million on the sale of 54,238 hectares at an average price of $1,095.99/ha. For the same stretch in 2017, industry had paid $70.28 million for 35,191 hectares at an average price of $1,997.20.

JuneWarren-Nickle's Energy Group

Alberta Land Sales

By Stephen Marsters

Industry paid $13.61 million into provincial coffers on June 13 for the Alberta land sale, highlighted by producers likely pushing the East Shale Basin oil play to the northwest.

A total of 31,826 hectares were acquired at an average price of $427.75.

Year-to-date, the government has attracted $190.05 million on 528,444 hectares at an average price of $359.65. To the same point of 2017, industry had paid $166.35 million for 485,166 hectares at an average price of $342.87.

Highlights

Four parcels comprised the bulk of the bonus total — at $12.37 million.

The land sale high was picked up by 2098894 Alberta Ltd. The company acquired a 4,096-hectare license for $7.28 million, or $1,776.77 per hectare. This bid was also the per-hectare high for this week’s sale.

Plunkett Resources Ltd. purchased a 4,352-hectare license for $923,581.44, or $212.22/ha.

Lacadena Land Company Inc. purchased a 3,840-hectare license for $2.93 million, or $762.33/ha.

And finally, Stomp Energy Ltd. picked up a 3,904-hectare license for $1.24 million.

Oilsands bid

Included in the bonus total was $30,279 on the sale of 256 hectares of oilsands leases.

Deltastream Energy Corporation picked up the only parcel, for $118.28/ha.


The Alberta government brought in $1.2 million at its June 27 land sale.

This was the lowest bonus paid at a single sale so far in 2018. The sleepy land sale saw 19,990 hectares exchange hands at a low average price of $59.82.

According to TD Securities Inc., the most interesting results were near Talbot Lake, where Perpetual Energy Inc. acquired 21 sections for roughly $200,000.

Despite the soft sale, the province had a positive second quarter. It took in $101.96 million on 289,412 hectares at an average price of $352.31. That’s higher than the $89.29 million on 259,022 (average $344.71) in Q1, although there were seven sales in the second quarter compared to five in the first quarter.

At the halfway mark of the year, Alberta has taken in $191.25 million on the sale of 548,434 hectares at an average price of $348.72.

JuneWarren-Nickle's Energy Group

Long Lake Southwest Expansion

Nexen Energy, a wholly-owned subsidiary of CNOOC Limited, announced a positive final investment decision on its Long Lake Southwest expansion project in northern Alberta.

The company earlier had said it expected a FID in the first half of 2018.

The approximately C$400 million project, which has received approval from the Alberta Energy Regulator (AER), will add 26,000 bbls/d of production from three well pads that will be tied-in to Nexen’s existing Long Lake oilsands facility.

Construction is set to begin shortly, with first oil anticipated in late 2020.

JuneWarren-Nickle's Energy Group

Rig Release Counts

By Stephen Marsters

Rig release counts across Western Canada to the end of May remain steady compared to last year, with one exception: British Columbia.

Overall, industry has drilled 2,699 wells through the first five months of 2018, excluding experimental holes, down four per cent from 2,803 wells rig released in January-to-May 2017.

But the 2,699 wells translated into a total of 7.98 million metres of hole, up two per cent from 7.81 million metres to the end of May last year.

The average length/depth of a well (excluding experimental wells) in Western/Northern Canada increased to 2,950 metres in this year’s January-to-May period versus 2,766 metres in the comparable period a year ago.

For May, operators drilled 249 wells compared to 252 a year ago.

Provincial stats, excluding experimental wells

Producers working in British Columbia drilled 26 wells in May compared to 28 a year ago, while the five-month tally has declined 26 per cent to 187 compared with 254 in January-May 2017. Operators have rig released 869,715 metres of hole to the end of May, down almost 19 per cent from 1.07 million metres in the year-prior period.

In Alberta, 159 wells were rig released in May, an increase of seven per cent from 149 wells drilled in the year-prior period (excluding experimental wells). The count is flat with last year through the first five months of the year, with operators rig releasing 1,500 wells this year compared to 1,509 in January-May 2017.

Operators working in the province have drilled 4.90 million metres of hole to the end of May, up four per cent from 4.70 million metres a year ago.

Saskatchewan operators drilled 62 wells last month compared to 74 in May 2017 (a decrease of 16 per cent). The five-month tally is off about three per cent, to 924 wells drilled versus 949 wells rig released in the first five months of 2017. Producers have rig released 2.02 million metres at the five-month mark compared to 1.86 million metres in the year-prior period (up nine per cent).

To the end of May, 951 of the wells drilled in Alberta had oil or bitumen as an objective compared to 905 wells last year, while 386 were approved for natural gas targets compared to 505 in the first five months of 2017 (excluding experimental wells). In Saskatchewan, 826 wells have chased oil, down from 842 a year ago.

There was one well drilled in Manitoba last month, while no wells were drilled in the year-prior period. Over the first five months of the year, 82 wells have been rig released in the province compared to 85 in the January-to-May period last year. Operators have drilled 157,379 metres in the province compared to 156,851 metres a year ago.

Many of the wells drilled to the end of May are still listed as standing. Of those with a final status, however, 85 per cent of the wells being drilled are resulting in oil wells this year, up from 66 per cent in 2017. Gas wells accounted for 11 per cent of the wells with a listed status, down from 27 per cent a year ago.

Rig release counts, including experimental wells

Operators drilled 3,197 wells to the end of May, including experimental wells, a decrease of four per cent from 3,330 wells rig released in the year-prior period.

In May, producers drilled 251 wells, including experimental holes, down almost two per cent from 255 a year ago.

JuneWarren-Nickle's Energy Group

Permitting Rises

By Stephen Marsters

Operators licensed 864 new wells across the country last month, up 24 per cent from 696 wells granted authorization in May 2017, with permitting rising in all western provinces except British Columbia.

A total of 3,638 permits have been issued across Canada to the end of May, an increase of five per cent compared to 3,452 in the first five months of 2017.

In Alberta, 350 licenses were issued last month compared to 304 in the year-prior period (up 15 per cent), while the province has granted 1,858 well permits in the first five months of the year, up 15 per cent from 1,614 to the end of May 2017.

Saskatchewan licensed 388 wells during the month, up 35 per cent from 287 last year. To the end of May, Saskatchewan’s license count if off 13 per cent to 1,309 from 1,505 in the comparable five-month period in 2017.

British Columbia approved 83 new licenses during May, a decrease from 98 a year ago. Over the first five months of 2018, B.C. has approved 370 new licenses compared to 271 in the January-May 2017 period.

Manitoba granted 41 well authorizations in May compared to four a year ago. The license count is up 69 per cent in the January-May 2018 period to 91 compared to 54 a year ago.

Operators in the four western provinces licensed 585 oil and bitumen wells last month (2017: 475), with the five-month tally at 2,297 permits compared to 2,322 in January-May 2017.

There were 167 gas wells authorized across Western Canada last month, up from 121 a year ago. For the five-month period, 760 gas wells have been permitted compared to 572 gas wells last year.

To the end of May this year, operators have licensed 3,000 horizontal wells versus 2,877 in the comparable period of 2017.

Producers licensed nine oilsands evaluation permits last month compared to none in May 2017. Over the first five months of this year, operators have permitted only 194 oilsands evaluation wells, up from 64 licenses to the end of May last year.

The top five licensees of new wells in May, excluding experimental and oilsands evaluation holes, were Crescent Point Energy Corp. (77), Canadian Natural Resources Limited (59), Husky Energy Inc. (51), Whitecap Resources Inc. (50) and Encana Corporation (46).

Including experimental wells, the top five licensees in May were: Crescent Point (77), Canadian Natural (61), Husky (51), Whitecap (50) and Encana (46).

JuneWarren-Nickle's Energy Group