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Groundbreaking year for Manitoba oil producers

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MANITOBA'S largest oil and gas company is on a drilling and hiring spree as the petroleum sector expands at a record-setting pace.

"Since about 2005, we have been ramping up and becoming busier and busier," Tundra Oil and Gas president and CEO Dan MacLean said Friday after a news conference celebrating Mining Week in Manitoba.

Fields of dreams

Oil drilling and production in Manitoba:

-- A record 578 wells were drilled in 2011. That's a 12.9 per cent increase from the 512 drilled in 2010.

-- 14.8 million barrels of oil were produced in 2011, a record. That's a 26.5 per cent increase from the 11.7 million barrels produced in 2010.

-- The industry spent more than $1 billion in 2011 exploring for oil. That's an increase of 11.9 per cent from the $894 million spent in 2010.

-- The industry produced 46,000 barrels of oil per day in December of last year, the latest month for which production data are available.

-- 205 wells have been drilled so far in 2012. It's projected more than 600 will be drilled by year's end, which would be a new record.

-- source: Manitoba Department of Innovation, Energy and Mines

"And it (2012) is another busy year. We're in quite a growth mode, building our asset base and applying new technologies... ."

MacLean said Tundra plans to drill about 220 new wells this year, which would be a 16.4 per cent increase from the 189 drilled in 2011.

It also plans to boost its staff to 215 full-time and 30 contract employees by the end of the year. That's an increase of 45 workers, or 22.5 per cent, from 2011's year-end staffing levels.

"We're hiring people to position ourselves to be successful. We see opportunities building upon opportunities," MacLean said.

As Manitoba's largest producer -- it has about 1,800 wells and generates about 40 per cent of the province's oil production -- Tundra plays a big role in the ongoing oil boom.

The Department of Innovation, Energy and Mines said a record 14.8 million barrels of oil were produced last year in Manitoba. The previous record was 11.7 million, set a year earlier.

"We've been riding this busy cycle since 2005. It's been phenomenal," said Keith Lowdon, director of the department's petroleum branch.

Lowdon said a number of factors are helping to drive oil-industry expansion in Manitoba, including high oil prices and technological advances that have enabled oil companies to extract more oil from the ground through things such as horizontal drilling, rather than the vertical-drilling methods.

Lowdon said that has led to a boom in drilling in the key oilfields in southwestern Manitoba. He said the biggest challenge companies face is finding enough workers, particularly with the drilling frenzy that's taking place in neighbouring North Dakota.

But despite that challenge, they're still expected to set a new record this year for number of wells drilled -- more than 600 -- and money spent on drilling and production -- in excess of $1 billion.

"There is a lot of new infrastructure being put in place," Lowdon said.

MacLean was one of the guest speakers at the news conference to celebrate Mining Week and to kick off the annual two-day Manitoba Rocks! event.

Manitoba Rocks!, popular with school children, features a variety of activities geared to helping Manitobans learn more about the mining and petroleum industry.

Innovation, Energy and Mines Minister Dave Chomiak also talked about the unprecedented success the province's petroleum industry is experiencing.

He said mining and petroleum is a $3-billion-a-year industry in Manitoba, employing more than 6,000 people and generating more than $176 million in employment income in 2011.

He announced two new initiatives aimed at enhancing the industry. The first is $1.2 million in additional funding for the Manitoba Geoscience Advantage Program. The money will be used to fund new geological mapping, which should lead to more exploration.

The second is a new online system to streamline mining applications.

Chomiak also said more than $84 million has been spent to cleaning up abandoned mine sites.

Republished from the Winnipeg Free Press print edition May 26, 2012 B6

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