October 10, 2006

Manitoba’s burgeoning oil industry has drilled more wells this year than at any time in the province’s history, toppling a record that has stood for more than 50 years, Science, Technology, Energy and Mines Minister Jim Rondeau announced today.

Tundra Oil and Gas drilled the 355^th Manitoba well last month, surpassing the 1955 record when 354 wells were drilled during the development of the Virden oil field.

“ln 2005 we broke all-time records for oil revenue and the number of wells licensed,” said Rondeau. “We’re already setting new records for 2006.”

Rondeau said with seven drilling rigs operating in the province, this year’s record could grow to 475 wells. Manitoba’s oil industry will invest an estimated $400 million in the province this year. Last year, the oil industry spent $243 million in Manitoba, a two-fold increase over 2004.

The province conducts public offerings of Crown oil and gas rights four times a year. Bidders apply under sealed tender to win the exclusive right to explore for and produce oil and gas from the lease area.

More information about Manitoba’s offering of Crown oil and gas rights and a complete summary of 2005 activity is available at http://www.gov.mb.ca/iedm/petroleum.

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• During 2005, 285 wells were drilled in Manitoba, a 140 per cent increase from 2004’s total of 119. Manitoba is on pace to drill as many as 475 wells in 2006.
• Manitoba’s annual oil production in 2005 was up approximately 27 per cent from 2004, to
  811,924 cubic metres.
• The value of oil produced in 2005 was approximately $320.7 million, a 64 per cent increase from 2004.
• Provincial revenues from the oil industry (royalties, production taxes, lease sale bonuses, rentals and fees) were $13.6 million during 2005, a 97 per cent increase from 2004.
• Gross royalties payable to freehold mineral owners were estimated to be $27 million in 2005.
• Surface-rights owners received approximately $5.2 million from rental payments and bonuses during 2005.
• Municipal tax assessments on wells and oil-field equipment were estimated to be $62.7 million (with taxes paid amounting to approximately $2 million).
• Oil industry expenditures in Manitoba were estimated to be $243 million in 2005, a
  108 per cent increase from 2004.
• Sixteen geophysical programs were run in 2005. Total coverage was 1,587 kilometres at a cost of approximately $2.9 million.
• Four sales of Crown oil leases and exploration reservations covering 68,238 hectares generated $6.13 million in revenue to the province in 2005, a 338 per cent increase from 2004.
• As of Jan. 1, 2005, there were 14 oil fields and 178 non-confidential oil pools designated in the province.