British Columbia surplus up, drilling sales strong

Thu Jul 17, 2008 5:48pm EDT
 
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VANCOUVER, British Columbia (Reuters) - British Columbia ended the last fiscal year with a C$2.9 billion surplus on higher tax revenues and profits from its provincial corporations, according to figures released on Thursday.

The western Canadian province also said it set a record of C$610 million in bonus bids on oil and natural gas rights sales in July, bringing the total for the current fiscal year to over C$1.3 billion.

Provincial revenues were C$39.9 billion in the fiscal year ended in March, C$2.4 billion higher than projected and up 3 percent from the previous year, according to its audited financial statement.

Earnings from Crown Corporations such as utility BC Hydro were C$288 million higher than forecast.

Economic growth in the province was 3.1 percent in the 2007 calendar year, above Canada's national average of 2.7 percent, but Finance Minister Colin Hansen reiterated a February warning that the province expected to feel some impact from the slowing North American economy.

The current budget projects a C$50 million surplus with C$750 million placed in contingency.

British Columbia's forestry industry has languished over the past year, but the western Canadian province has seen strong real estate growth in Vancouver and benefited from oil and natural gas production.

The northeastern Peace River region has garnered attention for massive natural gas reserves trapped in shale rock and is being compared with the prolific Barnett shale play of Texas.

EOG Resources Inc, Nexen Inc and a partnership of EnCana Corp and Apache Corp have all reported finding trillions of cubic feet of gas under their properties in the region.

The province offered 149 parcels for drilling in July and sold 146. It will offer 136 parcels at the next sale scheduled for August 13.

(Reporting Allan Dowd and Scott Haggett; editing by Janet Guttsman)