Cash-rich Newmont Mining mulls boosting dividend as peers pursue debt reduction
TORONTO — Reuters
Published Wednesday, Aug. 09, 2017 4:29PM EDT
Last updated Wednesday, Aug. 09, 2017 5:11PM EDT
With a plump $3.1-billion (U.S.) pile of cash, Newmont Mining Corp. is mulling a sweeter dividend to attract a broader shareholder base, a move that makes it an outlier in the still recovering gold sector.
Although miners are no longer crippled by expansion-fuelled debt loads, the priority for their cash is building and expanding mines to replace depleting gold reserves, and further reducing debt.
Dividend increases are not on their immediate horizon, making Newmont, which has said it was considering doing so, stand out.
Like other producers, Newmont is also investing in expansion projects, but with the fattest purse among gold producers and no debt due until 2019, the Colorado-based miner may have excess cash to return to shareholders.
Newmont, the world’s second-biggest gold producer, has cut net debt by more than 70 per cent since 2013 to $1.5-billion, and will mull dividend payout options at its October board meeting.
“One of the things we’ll be looking at is what’s an appropriate level of dividend that might attract new investors,” chief executive Gary Goldberg told Reuters.
Newmont is nipping at the heels of Barrick Gold Corp. for the title of world’s largest gold miner, with plans to produce between 5 million to 5.4 million ounces of gold this year, against Barrick’s forecast of 5.3 million to 5.6 million ounce output.
The two miners are also wrestling for top valuation, with Newmont’s market capitalization of $19.3-billion just behind Barrick’s $19.4-billion.
Among Newmont’s potential options to boost its dividend is issuing a one-time special payment, said Chris Mancini, an analyst at Gabelli Gold Fund.
The company could also boost its gold price-linked dividend again, as it did last year, analysts said.
“The market does want them to reinvest in projects which have high rates of return and relatively low risk,” said Mancini.
“To the degree that there is excess cash on their balance sheet, the market would like to see that returned to them, in the form of a dividend.”
At a $1,250 per ounce gold price, Newmont would pay 30 cents a share for its 2017 dividend, a yield of about 0.8 per cent, TD Securities analyst Greg Barnes said in a note to clients.
That is broadly in line with current industry yields, but an increased payout could potentially put Newmont ahead of its peers.
For now, richer dividends are not compelling for producers including Barrick, Kinross Gold Corp., Goldcorp Inc. and Agnico Eagle Mines Ltd., which are focused on reducing debt or investing in projects.
But as gold miners gain firmer footing, there is potential to mirror global diversified miners, which are hiking dividends as commodity prices and profits surge, Clarksons Platou global mining analyst Jeremy Sussman said.
Rio Tinto, the world’s second-largest miner, last week promised a record-setting $2-billion interim dividend, for example.
“If we were to see this on the gold side from one of the majors, especially in a meaningful way, I think the others would probably feel some pressure to follow suit, because at this stage, the vast majority of balance sheets are in very good shape,” Sussman said.
Economic Impacts of Canadian Oil and Gas Supply in Canada and US (2017-2027)
- Published on August 9, 2017
- Allan Fogwill, M.R.M., CD
- President & CEO at Canadian Energy Research Institute
CERI’s new report investigates the economic impacts of oil and gas supply on the Canadian and US economies.
The longest undefended border on the planet runs 8,891 kilometers and is shared between Canada and the United States, the second and fourth-largest countries, respectively. These two countries not only share the longest international boundary, but the largest bilateral trading relationship in the world with trade totaling CAD$752 billion at the end of 2016. Canadian exports to the US at end-2016 were CAD$392 billion and imports from the US were CAD$360 billion – and these totals don’t even include foreign direct investment between Canada and the US.
This study examines the economic impacts of the Canadian oil and natural gas industry on both Canadian and the US economies. This study is particularly timely, given the US administration’s mid-May 2017 notification to Congress and trading partners that it plans to renegotiate the NAFTA, effectively starting the 90-day countdown to renegotiations.
Total economic impacts from investment and operations of Canadian oil and gas projects contribute to economic growth and employment in both countries. Capital investment of CAD$380 billion and operational revenues of CAD$1.8 trillion from Canadian oil and gas projects over an 11-year period will generate CAD$2.7 trillion in Canadian GDP and 6,572 thousand person-years in Canada and US$45.6 billion in the US GSP and nearly 406 thousand jobs in the US.
- Canada and the US share the world’s largest bilateral trading relationship, with trade totaling CAD$752 billion at the end of 2016.
- A significant component of Canada’s exports to the US is the export of crude oil, crude bitumen and natural gas.
- Any out-of-Canada spending by the Canadian oil and gas sector implies a spill-over effect, that can be attributed to the development of Canadian oil and gas resources.
- Total economic impacts from investment and operations of Canadian oil and gas projects contribute to economic growth and employment in both countries.
- Capital investment and operational revenues from Canadian oil and gas projects over an 11-year period will generate CAD$2.7 trillion in Canadian GDP and 6,572 thousand person-years in Canada.
- Total US impacts: US$45.6 billion GSP and 405,833 jobs. US top ten states are revealed in the study.
Canada’s drillers boosting capital spending as industry activity improves
August 9, 2017
Ensign Energy Services has joined other Canadian oilfield services companies announcing higher capital spending programs as North American activity levels improve.
Ensign cited “cautious optimism” about commodity prices and stronger demand for oilfield services this week, boosting its 2017 capital budget to the $90-to-$95 million range from $61 million.
The increase will fund construction of one new 1500-series, ADR (automated drilling rig) for the United States, one new series-1,000 ADR for Canada, the purchase of a “new heavy-Permian type” service rig and enhancements to the company’s super-spec fleet.
Both the new ADR 1500 rig and the new ADR 1000 are expected to go to work in the third quarter.
The drilling contractor said that the process of converting its drilling fleet to high-specification, high-quality ADR drilling rigs is delivering greater market share in all areas of its business.
Ensign’s revenue was 32 per cent higher in the second quarter than last year’s figure and 11 per cent higher in the year to date. It also narrowed its net loss in the quarter to $33.81 million.
Similarly strong second quarter results prompted both Precision Drilling and pressure-pumping company Calfrac to boost their capital spending programs.
Precision Drilling has increased capital spending to $138 million for this year, up from $119 million planned previously, based on stronger North American activity levels and higher day rates in its international drilling division.
Precision’s total revenue in the second quarter jumped 68 per cent to $276 million from $164 million a year ago.
“Demand for our Pad Walking Super Triple rigs remains strong in all of our North American markets,” said Kevin Neveu, Precision’s chief executive, in a statement.
Precision also reported a 120 per cent jump in its Q2 drilling rig utilization days in Canada. In the United States, the increase was 143 per cent.
Calfrac also responded to the ramp up in industry activity recently by boosting its capital budget to $65 million from $45 million.
In the second quarter, Calfrac’s revenue more than doubled to $325.34 million from $150.61 million in last year’s period.
Calfrac also narrowed its net loss in the quarter to $20.35 million as it rode the wave of stronger activity in Canada and the United States, management said.
August 8, 2017
After decades of being called “gold” while exploring and developing the world’s largest “diamond” deposit just east of Prince Albert, SK in Fort a la Corne, Shore Gold will become Shore Diamonds.
Management and the Board believe that the name Shore Gold Inc., while a connection to the history of the Corporation, no longer reflects the current focus of the business. Management and the Board of Shore Gold Inc. believe that rebranding will ensure that investors and stakeholders will better understand the Corporation’s core business. As a result, the Corporation is proposing to changes its name to Shore Diamond Corporation.
Also, given Shore’s recent agreement with Rio Tinto, it is worth noting that Shore’s Board of Directors is proposed to include Peter Ravenscroft. According to the Circular on page 8:
He previously was Head of Global Exploration for Cliffs Natural Resources Inc. as well as Managing Director, Technical Evaluation Group at Rio Tinto based in London, with global accountability for internal technical reviews of all major capital projects going before the Rio Tinto board. Also group accountability for the compliance of all Rio Tinto companies’ mineral resource and ore reserve reporting. Mr. Ravenscroft was with Rio Tinto for seventeen years, in a variety of roles in the UK, Australia and Canada, with particular involvement in diamond projects and operations. Before joining Rio Tinto, Mr. Ravenscroft was involved in the southern African mining industry, with De Beers, Anglo American and Gencor, and as a geostatistical consultant.
Claims staked by diamond exploration companies suggest diamonds may exist near Maple Creek Saskatchewan
Diamonds in the Bluffs?
Claims staked by diamond exploration companies suggest high likelihood the precious gems exist near Maple Creek
August 8, 2017
NEWS PHOTO DOMINIQUE LIBOIRON
Diamond Projects Inc. has staked mining claims covering 400,000 acres south of the Cypress Hills with an eye on making a diamond discovery.
Maple Creek News
Diamonds are that one gem everyone wants.
Some of us hope to buy one for a significant other one day, while some of us yearn to receive one.
But most of us also tend to see diamonds as something far away, something to strive for.
So, it could come as quite a surprise to some in Maple Creek that the most precious of precious stones might just be in their proverbial own backyard.
According to Sean Spelliscy of Diamond Projects, a subsidiary of Gem Oil, Stornoway Diamond Corporation recently staked a claim to an area south of Maple Creek, about 25 kms down Highway 271.
It isn’t known what methods the company used to identify the area as a possible diamond source, but Spelliscy says they don’t stake claims unless they have solid evidence to do so.
“(Stornoway) found a commodity there of something potentially valuable,” says Spelliscy, a 30-year veteran of resource exploration. “
So, they found some indication that a resource exists.
And these aren’t your garden-variety explorers, they are the best there are.
“They recently found the Pikoo Diamond Field in north-central Saskatchewan, which is an amazingly rich small deposit.
The Stornoway team is second to none, so that’s very encouraging, not only to Maple Creek but to the entire province.”
Diamonds are found in an igneous rock called kimberlite, formed as chimneys of magma cool down following volcanic eruptions, which the trusty Internet says exists aplenty in Siberia and South Africa.
Apparently, Stornoway thinks there is also kimberlite in southwest Saskatchewan.
Spelliscy says his company has been actively exploring for diamond in Saskatchewan since about 1990, staking claim to finding the Star kimberlite, found at Fort à la Corne east of Prince Albert in central Saskatchewan.
The Star is the largest diamondiferous kimberlite in the world and currently being explored by mining giant Rio Tinto under option from Shore Gold Inc.
He says diamond giant De Beers had been looking for diamonds in south Saskatchewan for decades, and was rumoured to have once found a small kimberlite pipe near Gergovia, 170 kms southeast of Maple Creek.
Speculative mining capital was scared off in mid-90s by a scandal involving a former penny stock company called Bre-X, which announced what turned out to be a fraudulent discovery that sent the small company’s total capitalization to more than $6 billion.
The scandal made risk capital hard to come by and Spelliscy says the claims near Maple Creek were all but forgotten.
Now suddenly, activity has resurfaced.
Spelliscy says his company staked a few claims in the area back in February 2017 based on a report by geophysical interpreter Laurie Reed, and now Stornoway’s claims all but confirm something is there worth getting serious about.
“Across the border in Montana, there’s always been a few diamonds showing up (among the gold),” Spelliscy says.
“So, there has always been the idea of diamonds (in this area), and I’ve talked to a lot of diamond exploration professionals who have always sort of been intrigued by the possibility if southern Saskatchewan.”
Southern Saskatchewan sits on the Wyoming Craton, a section of the earth’s crust where Spelliscy says kimberlites have been found before, specifically referring to a past group found in Montana.
He says a lot of variables have to be in place for diamond to be formed, such as what temperatures were in place close to the surface when volcanic eruptions occurred.
If those were not cool enough, the kimberlites would not be able to preserve their diamonds, and the diamond would turn to carbon.
“But the main thing is finding the right rock. If you find the right rock, which is the kimberlite, then you have to test it.”
An advantage to this area, as opposed to exploration in northern Saskatchewan for example, is the easy access.
Spelliscy says the simple existence of roads can cut the costs in half, adding to the viability of any search.
“If you can truck everything in … your costs will just whittle down, which is great. It’s the ultimate place in the world to find something.”
And if that something is diamonds, it’s going to mean a lot more than romance for the people of southwest Saskatchewan.
The average value of a diamond mine is $11 billion US with a capital development cost of $1.7 billion US.
Box 1111, Regina, Saskatchewan S4P 3B2
C (306) 541-5678 T (306) 543-5678
Mining industry can now predict opposition to projects before it’s too late
August 7, 2017
It’s sounds too good to be true, but a new company is proving miners they can foresee opposition or any other form of social conflict related to their projects, before they even attempt going through a licencing process.
Chalkstone, a UK-based company founded by Donald Bray, a political anthropologist and academic at the University of Cambridge, bases its success in a very unique method, applying what’s known as “granular social intelligence.”
“We take a systemic approach and mix methodologies, combining big data and quantitative analysis with ethnography, qualitative interviews and focus groups, all of which help us dig deep into particular issues and accurately define the social stance of a target group,” Bray explains on the phone from his home in Paris.
“We are not interested if the community is, in any way, being taken advantage of” — Donald Bray.
Before going further, he’s quick to note that the goal of his company is not just to help mining companies get what they want, but to assist them in building mutual trust with the groups living in the areas in which they operate.
“We are not interested if the community is, in any way, being taken advantage of,” he says. “Our due diligence runs in a number of different directions.”
The expert, with more than 15 years of experience working across the globe, particularly in conflict zones, is not saying mining companies are the “bad guys” in the story.
“It’s not that firms don’t care about CSR [corporate social responsibility] or don’t want to invest in it. The problem is that most tools currently available don’t really help them grasp the human aspect of their projects,” he says.
Donald Bray, Chalkstone founder.
Half of all risks faced by extractives companies are non-technical ones, which in turn account for nearly 75% of all projects delays. “For a mid to large sized mining company, the costs of these delays (socio-political and community risks) can add up to some $20 million a week,” says Bray. “This is huge and it deserves far more attention than mere box-ticking or forms of corporate philanthropy.”
Chalkstone already has a known success story under its belt. After an intensive study on a ruby mine and a copper deposit in Afghanistan, applying counter-insurgency tactics used by deployed troops, Bray was hired in 2015 by Gemfields (LON:GEM), the world’s largest emerald and ruby miner. At the time, the precious gems firm had committed to building an emerald mine in Colombia.
Part of Chalkstone’s work to help Gemfields enter the market was the creation of a communications platform based in text messaging, which allowed the mining company and local communities to talk freely to one another.
Named by the community as “Suna Verde” (meaning “Green Pathway” in the Muisca aboriginal language), the system kept locals updated on everything from job-training initiatives to when the “health brigade” (a team of doctors and nurses that travel around the countryside) would be in each village. Soon, says Bray, Suna Verde was rivalling the radio as the region’s main source of news and other information.
“The experience showed us that communities want jobs, roads, hospitals and clinics, schools, and any other benefit offered by mining companies, but they want to be actively involved in their decisions. They don’t want to be just beneficiaries of someone else’s goodwill,” says Bray. “This is one of the most important lessons I’ve learned and which is transferrable to almost any community in the world.”
During the first months of work for Gemfields in Colombia, Chalkstone warned the company there was opposition brewing for another international mining firm in the region. Only four months later, that miner was hit by protests and even armed attacks.
“When you invite thousands of voices into a conversation, you need to be prepared for dissenting opinions (…) By listening to all of them, you’re able to get in front of the risks. That’s what happened in Colombia… we were able to see things that you wouldn’t normally see and we told Gemfields about it.”
While Gemfields decided in May to leave Colombia and Sri Lanka to focus on its African projects, the fact the company didn’t face hostility from community members is a testament to Chalkstone’s work, says Bray.
The company, currently involved in mining and oil and gas projects in East Africa, as well as a new venture in Colombia, believes its novel approach could also be useful to investors.
“Given that nearly 66% of shareholder value in a junior miner is linked directly to socio-political and community risks, according to some calculations, investing in understanding the social environment in which a miner will operate shouldn’t be an afterthought or something people turn their minds to only when times get tough,” Bray warns. “Trust is valuable,” he concludes.
These are a few examples of conflicts an approach such as Chalkstone’s could have prevented:
BHP presses for cheaper power ahead of Olympic Dam mine expansion
August 4, 2017
(Image courtesy of BHP Billiton)
BHP Billiton is looking for ways to shore up power supply and bring down power costs at its Olympic Dam copper mine in Australia, as it plans to expand following a string of electrical outages, the mine’s head said on Friday.
The mine has been badly hit by an energy crisis in Australia stoked by the rapid rise of wind power and closure of coal-fired power plants. This has destabilised the national grid and soaring natural gas prices have driven up power tariffs.
A blackout last year forced Olympic Dam to shut for two weeks, costing the company $105 million. Over the past year, rising power bills have added around $30 million to its costs.
Olympic Dam President Jacqui McGill said security of supply, price and system reliability are all challenges for the mine.
“Cheaper power – that’s the key for me,” she said at an American Chamber of Commerce event in the South Australian capital of Adelaide. Power prices need to drop 25 percent to make Olympic Dam copper more competitive globally, she said.
While the state of South Australia has taken steps, such as lining up 129 megawatt hours of battery capacity from Tesla Inc , to help avert power outages from next summer, more needs to be done, McGill said.
Olympic Dam, South Australia’s biggest power user, draws about 125 MW alone, around 8 percent of the state’s demand.
“We’ve currently got a nationwide study underway to look at our options for power,” she said.
Batteries would not help much, she said. “When you draw the amount of power that we do, options like that don’t provide us with a lot of confidence.”
BHP will need more power and cheaper prices to justify going ahead with plans to expand output from 218,000 tonnes this year to 280,000 tonnes by 2022. It plans eventually to more than double output using low-cost heap leach technology that the company is trialling in Adelaide.
McGill said tests to smelt material produced from the heap leach process have been successful, with “significant progress” made toward producing uranium and copper cathode. The trial is due to be completed in the 2019 financial year.
Heap leaching involves stacking crushed ore over a pad, pouring on acid and water and blowing air up through the pad to leach out metals.
(Reporting by Sonali Paul; Editing by Tom Hogue)
Aug 4, 2017
If you go to https://www.gasbuddy.com/Charts you can create charts on average fuel prices by city, province, etc., over any duration you want.
Alberta introduced a carbon tax on January 1st, 2017.
If you look at the average Alberta vs. Saskatchewan fuel price for the past year, the Alberta price went above Saskatchewan for the first time in decades with the introduction of the tax.
Here is the past year’s chart:
Here is the past 8-years’ chart:
Further study reveals that Alberta went from being on average about 6-10 cents per litre cheaper than Saskatchewan, to 6-10 cents per litre more than Saskatchewan. So, about a 12-20 cent per litre change in fuel price.
The cost of producing a barrel of oil and gas varies widely across the world, setting up winners and losers as the price of crude fluctuates at historically low levels.
By WSJ News Graphics
Last updated April 15, 2016 at 2:30 p.m. ET
The world has changed for oil producers. When crude-oil prices were more than $100 a barrel just two years ago, the ensuing profits were huge, filling government coffers and swelling company earnings. Now prices barely cover the average cost to get the oil out of the ground in places like the U.K. Additional expenses, like taxes on profits, mean that the actual breakeven price for many projects is higher, and newer and more complex projects generally fall well above the average cash cost of production. Oil-producing nations from Saudi Arabia to Norway are reining in spending while big energy firms like Royal Dutch Shell PLC and Chevron Corp. have made deep spending cuts and laid off thousands of workers. Here’s a look at the average cost of producing one barrel of oil—42 gallons—in a dozen nations.
Capital spending: 64.6% of barrel cost
Much of Norway’s remaining resources lie in remote waters and are more difficult to extract or are further from existing infrastructure and markets, resulting in higher development and transportation costs. However, the region hasn’t been in production for as long as oil and gas fields in neighboring U.K. waters, so there are still substantial resources left to extract.
Capital spending: 45.2% of barrel cost
Nigeria is Africa’s largest oil producer, but frequent incidents of sabotage and oil theft have hindered the sector onshore. Many newer projects are focused offshore, where production is more secure but the capital investment required is higher. Earlier this year Royal Dutch Shell PLC said it would delay a decision to progress a deep water project.
Capital spending: 51.1% of barrel cost
The U.K. has some of the highest production costs in the world as the oil and gas is offshore in deep stormy waters. The region has been in production since the 1970s and remaining resources require more costly technology to extract, while aging infrastructure such as pipelines, production hubs and terminals require constant maintenance and upgrades.
Production costs: 43.4% of barrel cost
Most production growth in Canada comes from oil sands deposits in the remote boreal forests of northern Alberta, which have some of the industry’s highest capital costs and longest development timelines. Canada’s oil sands represent the third largest reserves in the world after Saudi Arabia and Venezuela, but its crude trades at a substantial discount to other North American grades due to its low quality and limited pipeline access to market. Canada also produces declining amounts of crude oil from conventional, shale and deepwater Atlantic wells.
Production costs: 34.9% of barrel cost
Twenty-five years ago Indonesia produced close to 2 million barrels of oil a day, but production has fallen and many of its aging fields require investment to enhance recovery. New opportunities are generally more technically challenging and costlier. Tough government policies have also discouraged investment, though more recently the government has sought to introduce more generous terms.
Production costs: 24.5% of barrel cost
Drilling in the U.S. Gulf of Mexico has migrated from shallower depths to deep water, sending production costs surging as companies plumb reservoirs thousands of feet below the water’s surface. Oil production in the region peaked in 2009 at 1.56 million barrels a day, before declining for several years. However, output surged last year to 1.54 million barrels a day as several long-awaited projects came online.
Administrative/transportation costs: 27.7% of barrel cost
Saudi Arabian crude is some of the cheapest in the world to extract because of its location near the surface of the desert and the size of the fields. That makes transporting those barrels an outsized piece of its costs, on a percentage basis, compared with countries where production costs are 10 to 20 times as high.
Administrative/transportation costs: 29.4% of barrel cost
Iran is trying to revive its oil industry after more than three years of sanctions crippled its ability to export, and the country has a big advantage over many of its peers: Its oil is very cheap to produce. The Islamic Republic’s output jumped 310,000 barrels a day in February compared with two months earlier after restarting exports to the European Union, according to the International Energy Agency.
Administrative/transportation costs: 23.4% of barrel cost
Extraction of oil in Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries, is in theory also very cheap but there are political and security challenges that add to its transportation and administrative costs. The country is fighting a war with Islamic State on its western flank, and has lost some oil fields to the militant group. Iraq has still managed to ramp up production to record levels last year.
Cost of producing a barrel of oil
Source: Rystad Energy UCube
Gross taxes: 37.9% of barrel cost
Despite holding the world’s largest oil reserves with 298 billion barrels, Venezuela’s output has been declining in the past two years because of lower investment in its costly heavy crude reservoirs. The Latin American nation produced 2.37 million barrels a day in February, a drop of 90,000 barrels a day compared to its 2014 average, according to the International Energy Agency. Taxes in Venezuela remain among the highest in the world at 50% of profits for foreign companies, though they have fallen from 95% when oil prices were above $100 a barrel.
Gross taxes: 43.9% of barrel cost
Russian oil is among the cheapest in the world to pump thanks to plentiful onshore resources, cheap labor and a well-developed network of pipelines, processing plants and other infrastructure. But the government tax take is levied at the wellhead and on exports, pushing up the costs of producing a barrel.
Gross taxes: 19.0% of barrel cost
Brazil’s oil production fell in January by 180,000 barrels after investments in its costly deep offshore basin were hit by low oil prices and a corruption scandal. In January, the country’s state oil giant Petrobras cut its five-year investment plans through 2020 by $32 billion to $98.3 billion. The South American powerhouse has opted for a fiscal middle ground with a corporate income tax at 34% for producers, lower than Venezuela but higher than Colombia’s 25%.
Gross taxes: 27.5% of barrel cost
After years of declining output, the U.S. oil and gas industry was revived by the shale boom, which kicked off amid the Great Recession and gained steam after 2008. Advances in technology—notably, the combination of horizontal drilling and a technique known as hydraulic fracturing—allowed companies to tap vast amounts of oil and gas trapped in dense rock formations. Oil and gas taxes vary by state in the U.S., with many imposing a production or extraction tax, or otherwise using the market price of oil or gas to tax output on a specific well. Some levy impact fees or charge companies as they drill new wells.
Note: An earlier version of this graphic displayed incorrect labels for the cost to produce a barrel of oil when hovering over the bars on each chart. This version has been corrected. (April 15, 2016)
Source: Rystad Energy UCube
Drilling forecast up 44% as southeast Sask. rebounds
Regina / 980 CJME
August 03, 2017 11:25 am
There’s good news for the province’s oil industry, particularly in the southeast.
More than $6 million in Crown petroleum and natural gas rights were sold in southeast Saskatchewan this month, out of a total of $8 million in total rights sales for August.
The province said this is the third sale of the current fiscal year for a total of $32 million for 2017-18.
The province also pointed to an update in the Petroleum Service Association of Canada’s (PSAC) 2017 Canadian Drilling Activity Forecast calling for 2,794 wells to be drilled in Saskatchewan, up from its original forecast of 1,940 wells.
“These figures, along with positive expectations by industry, suggest our oil and gas sector is regaining momentum after a prolonged period of transition,” Energy and Resources Minister Dustin Duncan said in a media release. “There’s no doubt that this kind of renewed activity in Saskatchewan’s oil patch bodes well not only for our communities that rely on this industry for jobs and growth, but also for our economy at large.”
The province said six exploration licences southwest of Radville received bonus bids this week, totaling $1,605,454.05 for 17,612.02 hectares.
The next public offering of petroleum and natural gas rights is on Oct. 3, 2017.