Historically, Saskatchewan has been known as a producer of wheat, potash, and uranium. But during the past few years it has also shown signs of becoming an emerging energy player in North American due to the fact that northern part of Williston Basin resides in that province.
The Williston Basin, a large sedimentary basin beneath Saskatchewan, Manitoba, Montana and North Dakota, has quickly become the fastest growing, financed, onshore hydrocarbon producing regions in the world since 2006, with an estimated 24 billion barrels of recoverable oil reserves valued at $2.4 trillion, this according to Continental Resources (NYSE: CLR) CEO Harold Hamm. And, the northern part of that basin in eastern Saskatchewan is considered by some to be one of the last highly accessible, on-shore oil and gas areas in North America, so much so that other Canadian oil companies such as Husky Energy (TSX: HSE) and Cenovous Energy (TSX: CVE) have already made early moves into the region.
Although small in terms of market capitalization (less than $20 million), energy junior Saturn Minerals Inc. (TSXV: SMI) has a big stake in the success of this region with 376,800 acres of exclusive oil & gas rights in the Williston Basin. In fact, according to the company, it has two of the largest oil blocks in that area. Saturn is actively exploring for new pools of hydrocarbons similar to those in the extended region and has a strong technical consulting team with a history of 70 successful wells of production just south in the Basin.
In a recent interview with SmallCapPower.com, Saturn Minerals CEO Stan Szary said he expects production costs in Saturn’s area of exploration to be among the lowest in the Williston Basin. “The higher netbacks (revenue from the oil, less all costs associated with getting the oil to market) we will realize holds a tremendous advantage in Saturn’s area and this would be significant. Production costs are estimated at about $20 a barrel and possibly lower, whereas Bakken oil in other areas of the Williston Basin can be $60 a barrel or even higher,” he said. (You can learn more about Saturn Minerals on their SmallCapPower Investor Hub here).
While Saskatchewan and Alberta have similar geologies it wasn’t until the election of the business-friendly Saskatchewan Party in 2007 that helped spark the province’s current boom, allowing Saskatchewan to be the only Canadian province to escape recession in 2009/2010 with one of the lowest unemployment rates in Canada to this day. And, because of the Williston Basin Saskatchewan passed Alberta in light oil production in 2011.
Disclosure
Ubika Research has received compensation from Saturn Minerals to provide analyst research coverage.
