Government announces new multi-lateral well drilling program

Saskatchewan has introduced a new multi-lateral well drilling program to grow incremental oil production in the province. This program creates a competitive royalty regime to encourage the use of multi-lateral horizontal oil wells, which will increase investment in the province.

"This innovative technique will put more rigs and workers in the field and support the Growth Plan goal of increasing oil production by 25 per cent to 600,000 barrels per day," Energy and Resources Minister Jim Reiter said. "Our new program will increase the province's revenue so we can continue to invest in classrooms, care and communities."

Multi-lateral drilling configurations allow a single well to access more of the oil reservoir. The Ministry of Energy and Resources estimates between 100 to 200 additional wells will be drilled in the province per year as a result of this program.

"The new incentive program for multi-lateral drilling opens up significant new drilling investment opportunities in Saskatchewan for Cenovus," Cenovus Energy CEO Jon McKenzie said. "It aligns with our focus to strategically build our integrated position in the Lloydminster region and we anticipate it will have positive impacts for provincial employment as well as new production growth. We are pleased to see government focus on creative ways to bring more investment to Saskatchewan."

"Multi-Lateral drilling is the cornerstone of Lycos' business, which is focused in the Lloydminster region straddling the Saskatchewan Alberta border," Lycos Energy President and CEO Dave Burton said. “This announcement gives a competitive edge to Saskatchewan resulting in our Company reallocating funds to the province and reaffirms the government's commitment to working with industry to attract substantial new investment in the local economies of Saskatchewan."

"The competition for capital investment is fierce and Saskatchewan's plan to modernize the royalty regime to recognize the use of new drilling technologies provides the right policy environment to attract investment to the province," Canadian Association of Petroleum Producers President and CEO Lisa Baiton said. "A more competitive royalty framework will help unlock valuable oil resources in Saskatchewan and will, in turn, create more jobs and additional revenues for the government and municipalities."

The oil sector is one of Saskatchewan's largest industries. The province is the second-largest oil producing jurisdiction in Canada and supports over 26,000 jobs.