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Saskatchewan’s oil patch is going to see a multi-billion dollar investment.
Raging River Exploration is announcing it will inject $3 billion over the next decade into drilling and enhanced oil recovery projects in the Kindersley area, along with $1 billion worth of continuous operations.
“I don’t think it’s ambitious at all, but really realistic,” said Neil Roszell, the company’s president and CEO.
He estimated anywhere between 2,500 and 3,000 new wells will be drilled in the next 10 years. In 2016, more than 200 wells are expected to be drilled, part of $175 million worth of capital spending by the company.
It comes as numerous companies are struggling, cutting staff or restricting exploration because of the current price of oil. As of Monday, crude oil was trading a little below $50 a barrel.
So why now and why Saskatchewan? Roszell foresees continuous economic benefits here, maybe not instantaneously, but over time. He added there’s evidence of consistency in the province, and no geopolitical risk.
“Looking in hindsight can be a good predictor for the future and what we’ve seen is stability in royalty regimes, stability in the regulatory regime,” he explained. “We haven’t seen this constant state of flux that we’ve seen in Alberta for the last number of years with multiple royalty reviews, different changes in the regulatory environment.”
Right now Roszell estimated the company produces about 20,000 barrels of oil a day. Over the next 10 years, he envisioned how that could double to close to 40,000 barrels, which could also translate into hundreds of new jobs.