03/22/2018 18:17 EDT | Updated 03/22/2018 19:00 EDT

Bids rise at Calgary Stampede canvas auction, as oilpatch optimism picks up

CALGARY — Proceeds from the Calgary Stampede chuckwagon canvas auction are on the rise, suggesting that economic optimism in the oil and gas sector is also picking up steam as crude prices stabilize above US$60 per barrel.

A total of $3.2 million was bid on Thursday night for the right to advertise on 36 chuckwagons invited to participate in the Stampede's annual GMC Rangeland Derby in July. The event is consider a bellwether for the health of the Canadian oilpatch headquartered in Calgary.

A year ago, the total came to $2.4 million, with the highest bid of $110,000 going to veteran Kelly Sutherland in his last auction before being required to retire due to the event's age limit of 65.

This year's top bid was $130,000 for driver Kurt Bensmiller, winner of last year's derby, who will fly the colours of Versatile Energy Services, Ltd., a private company based in the resort town of Sylvan Lake in central Alberta.

"We tried to buy in (last year) but we were too small. This year I think we can afford to do that and get our name out," said a beaming Versatile president Kent Stormoen on the sidelines of the event.

"When I hear there are 5.6 million people who watch and listen to this, I look at it as a great avenue to get our name out."

He said the 13-year-old company has about 175 employees split between Alberta and North Dakota.

Versatile sponsored Bensmiller in smaller chuckwagon competitions last summer and was pleased with the resulting rise in business in Canada.

"I'm definitely impressed (with the bid). I'm glad the economy bounced back," said Bensmiller, who won a bid of $85,000 last year.

He said the money would go to paying for the care and feeding of his horses.

"We're overwhelmed by the support of the businesses," said Dave Sibbald, chairman and president of the Calgary Stampede Board.

"We had six new bidders tonight and we had 12 bids over $100,000. Those businesses with their support tonight were ecstatic, so it's a very good (economic) indicator."

The auction results are getting closer to the record year of 2012, when bidders pledged just over $4 million — including the highest bid of $300,000 by oilfield services firm Tervita Corp. — at a time when oil prices were hovering above US$100 per barrel.

New York-traded West Texas Intermediate closed Thursday at US$64.30 per barrel, up from US$48.04 a year ago, but prices paid for Western Canadian Select oilsands blend hasn't matched the increase, a situation blamed by observers on not enough export pipeline capacity.

About 80 per cent of the canvas auction proceeds go to the drivers and the rest is used for prize money, safety and other chuckwagon initiatives.

The Stampede says three sets of fathers and sons and three pairs of brothers are to compete at the chuckwagon races this year.


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