www.ir.gov.sk.ca
The Saskatchewan Natural Gas Advantage
Availability of Crown Mineral Rights
Ed Dancsok, P Eng., P Geo.
Director
Geology & Petroleum Lands Branch
www.ir.gov.sk.ca
Outline
1. “The Lay of the Land”
2. Disposition Types
3. Gas Areas
4. Land Values
www.ir.gov.sk.ca
MINERAL RIGHTS IN SASKATCHEWAN(SURVEYED AREA)
CLASS AREA PERCENTAGEMillions of Ha.
FREEHOLD 7.1 22%
DOMINION CROWN 1.0 3%
PROVINCIAL CROWN 24.3 75%
Total 32.4 100
DISPOSITION TYPES
- SPECIAL EXPLORATORY PERMITS
- EXPLORATION LICENCES
- LEASES
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Crown Oil and Gas Rights (Dispositions)
March 31, 2004 March 31, 2005
Number Hectares Number Hectares
Leases 19,396 4,588,351 20,160 4,703,556
Exploration Licences 445 960,606 347 787,256
Special Exploratory Permits 13 734,814 14 821,051
Lease of Space Agreements 25 26,499 28 26,547
Total 19,879 6,310,268 20,549 6,338,410
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Oil Shale/Oil Sands Dispositions
Number Hectares
Oil Shale 14 477,936
Oil Sands 13 342,599
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CROWN DISPOSITIONS
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SE SASK
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SW SASK
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Special Exploratory PermitsSIZE: UP TO 200,000 HECTARES (OVER 770 SECTIONS)
TERM: 5 YEARS - NO EXTENSIONS
RENTAL: 25 CENTS PER HECTARE PER YEAR
COMMITMENT: FIRST 2 YRS AT LEAST $2.00 PER HECTARE
LAST 3 YRS $4.00 PER HECTARE
*TO BE SPENT ON APPROVED EXPLORATION ACTIVITY(DRILLING OR SEISMIC)
*** TECHNICAL MATERIAL MUST ACCOMPANY SEISMIC CLAIMS ***
*DRILL A MINIMUM OF ONE WELL. IF PERMIT EXCEEDS 100,000 HA THEN DRILL TWO WELLS
EXPECTATIONS: TO CONVERT 25% TO A LEASE
** NO PRODUCTION WITHOUT GOING TO LEASE **
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Lease Selections*No discovery*
• 25% of permit area• Blocks no larger than 3 x 3 sections• Blocks must be separated by at least one mile• Blocks can touch at corners• 60 days after permit termination to make selections
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Lease Selections*Discovery*
• Can be made any time during term of permit• 25% of permit area• Any configuration for zone of discovery• Must demonstrate commercial discovery• Can have up six months to make selection• Normal leasing on remaining zones
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CROWN DISPOSITIONS
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Exploration LicencesSIZE: FROM 1 TO 36 SECTIONS
TERM: 2 YEARS FOR MOST OF THE PROVINCE3 TO 4 YEARS FOR NORTHERN AREAS
RENTAL: $1.75 PER HECTARE
COMMITMENT: TO DRILL A WELL
LEASE SELECTION: SECTIONS OF LAND EARNED ON THE BASISOF DEPTH OF WELLS DRILLED.
RIGHT TO EXPLORE AND PRODUCE OIL OR GAS *
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LeasesSIZE: UP TO 3,173 HECTARES (49 QUARTERS)
(FROM PERMITS ONLY)
Leases from sales are usually one section or less, however, postings of up to four sections will be accepted.
TERM: 5 YEAR PRIMARY TERM
Then continuance as long as production is obtained or other special conditions prevail (e.g. Gas area)
***Complete continuance guidelines located on websiteat: Land Tenure/Resource Assessment
RENTAL: $3.50 PER HECTARE
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Criteria RequiredGas Area Designations
• Poor market conditions• Poor economics due to low prices• Lack of accessible pipeline facilities• Environmental restrictions• Resource conservation restrictions
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LANDSALE VALUES ($/HECTARE)
0
100
200
300
400
500
($/ha)
Leases Exploration Licences Total
www.ir.gov.sk.ca
LAND PRICE COMPARISON
2005 LANDSALE AVERAGES
Saskatchewan - $275/ha.
Alberta - $609/ha.1
British Columbia - $823/ha.1
***The REAL Saskatchewan Advantage!***
1Nickel’s DAILY OIL BULLETIN
www.ir.gov.sk.ca
0.23
2.72
0.42
1.41
9.81 16.48
7.42
3.51
2.08
1.30
3.67
5.29 8.30
11.31
7.11
9.34
5.15
4.87
3.82
2.47
4.69
5.21
3.97
0.00
9.07
10.75
22.62
37.16
77.64
37.33
34.12
108.35
123.68
148.59
18.20
59.94
34.95
36.30
32.54
16.40
13.62
83.68
199.74
65.68
122.19 131.00
54.03
45.67
48.33 56.21
102.91
158.74
80.78
113.99
0
50
100
150
200
Mill
ions
of
Dol
lars
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Calendar Year
VALUE OF CROWN LAND SALES
16.30
17.28
28.98
14.98
19.62
29.20
21.20
0
5
10
15
20
25
30
35
40
45
50
Mill
ions
of
Dol
lars
OCT/04 FEB/05 J UNE/05 OCT/05
Month of Sale
2004 - 2005 LAND SALES
2005 to
date
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Landsale Notices and Results
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