Oil and Gas Tenure Sales return after 3-year hiatus
Three-and-a-half years after British Columbia’s monthly petroleum and natural gas tenure dispositions stopped in May 2021, sales resumed in December 2024. These sales are much smaller than years past, with up to three parcels offered each month.
Since December, a total in tender bonuses of $31,957,323.90 has been paid to the provincial government as a result of the sales.
Although there have been few parcels offered since sales resumed, most have received successful bids, ranging in price from $121.44 to $262.79 per hectare for leases; and $3,877 per hectare for the one drilling licence which was sold in April.
In December, two leases were offered for a total of 792ha. The top bid of $195.17 per hectare received was for a 528ha parcel located in the Sunset and Saturn area, for a tender bonus of $103,049.76. The total tender bonus for December was $128,723.76.
The January 2025 started the year off with just one 262ha lease for sale, in the Sunset area. The successful bid of $121.44 per hectare for a bonus of $31,817.28 was paid by Synergy Land Services.
Two leases were offered in the February sale, with Synergy again having the top bid of $241.79 per hectare for a 660ha lease in Sunset, and a bonus of $159,535.20. The total tender bonus paid for the two leases was $171,560.20.
No parcels were offered for sale in March.
April’s sale saw the biggest bonus paid for a drilling licence since July 2017, with Cougar Creek Land Ltd., paid $3,877 per hectare for an 8,093ha drilling licence in the Tupper and Cutbank area. The total bonus paid on this parcel was $31,376,561.
One of the two leases offered in the April sale received a successful bid of $262.79 per hectare for a 528ha lease in the Saturn area from Synergy Land Services. No successful bids were received for the other lease offered.
The May sale saw two parcels offered with only one receiving an acceptable bid. Synergy Land Services purchased that 519ha lease in the Sunrise area for $211.77 per hectare, for a total tender bonus of $109,908.63.
Most of the subsurface petroleum and natural gas resources in British Columbia are owned by the province. Through these sales, companies enter into a tenure agreement with the province, allowing private companies to develop these resources.
Drilling licences give companies the right to explore for petroleum and natural gas, while leases give the companies the right to produce both petroleum and natural gas, in accordance with the Petroleum and Natural Gas Act, and the Oil Activities Act.
Although the tenure agreements give companies the right to explore for or produce the resources, approval to carry out the work must be obtained from the BC Energy Regulator, which is responsible for overseeing oil and gas operations in BC.
Consultation with First Nations is an important part of issuing permits and licences, and each of the parcels listed in the tenure sales notices come with a list of limitations associated with the rights purchased, including respecting Treaty 8 and First Nations agreement, wildlife and environmental considerations and cumulative effects analyses.
There will be no parcels offered for the scheduled June 4 sale.