B.C. sold $404 million of natural gas and petroleum rights in June, adding to the ongoing rush of producers focused on unconventional gas plays in the province’s northeast.
Bill Bennett, minister of energy, mines and petroleum resources, said the sale was the fifth largest in B.C.’s history.
“Investor interest of this magnitude is also strong evidence that British Columbia is a very attractive place for informed investors, thanks to our innovative royalty programs and world-class resources.”
The sale included 117 land parcels in northeast B.C. totalling 140,012 hectares. Most of the parcels were located in the extreme northeast portion of the province in an area called the Cordova embayment.
Yet much of the focus on B.C.’s gas riches has been placed on the Horn River and Montney basins. That’s where Calgary-based gas giant Encana Corp. (TSX:ECA) has focused much of its effort recently.
Encana inked a memorandum of understanding (MOU) on Thursday with state-owned China National Petroleum Corp. (CNPC) regarding the gas player’s assets in northeast B.C.
BIV reached Encana spokesman Alan Boras at his Calgary office Friday morning. He said the MOU was one of several deals signed between Canada and China on the eve of the G-20 summit this weekend.
Boras said the MOU provides a framework for the two companies to negotiate a potential joint venture investment in the Horn River, Greater Sierra and Cutbank Ridge areas of Northeast B.C.
Boras said: “We’ve been lining up third parties to come into our land base to accelerate development with their capital … this is potentially another one of those joint ventures.”
Encana holds approximately 2.6 million acres of land in northeast B.C. and production from that land base totalled 535 million cubic feet of gas per day in the first quarter of 2010.
Boras said Encana is aggressively hunting potential joint venture partners to develop its wealth of shale gas plays in Canada and the U.S.
In March, BIV reported that Korea Gas Corp., South Korea’s state-owned natural gas company, planned to spend $1.1 billion over the next five years to develop natural gas projects with Encana in northeast B.C. (See “Major international players eye B.C. gas riches” – issue 1063, March 9-15, 2010).
In the past three years, the company has attracted US$4 billion in joint venture commitments in both Canada and the U.S.