In Saskatchewan oil news this week, Legacy Oil and Gas announced details of its 2010 budget and provided production guidance for the year.


Legacy announced that it would spend $117 million to drill 59 wells in 2010 primarily focused at Taylorton, Antler-Frys and Heward-Stoughton areas of southeastern Saskatchewan.

Between November 2009 and early 2010, Legacy drilled 15 net wells with a 100-per-cent success rate.

Given the strong management team at Legacy and the recent success at its Bakken wells at Taylorton, I continue to like the company's future prospects.

Elsewhere, Crescent Point Energy announced its capital budget and plans to spend $450 million in 2010, a 38-per-cent increase over 2009.

Recently, Crescent Point acquired further oil assets near the town of Shaunavon in southwestern Saskatchewan. As part of the deal, Crescent Point acquired another 172 net sections of undeveloped land in the lower Shaunavon formation.

Crescent Point has three drilling rigs running simultaneously in the light oil play and expects to drill 38 net wells in the area in 2010.

Given the recent acquisitions of TriAxon Resources and the Shaunavon assets, we have increased our one-year target on Crescent Point to $49.25 a share, versus $45.50 per share previously.

In addition, the shares of Painted Pony Petroleum have been running lately. The company announced a $90-million budget for 2010 and plans to drill 30 net wells over the next year.

The company's key areas are in the Midale-Weyburn-Kisbey areas in southeastern Saskatchewan. The company expects to operate two drilling rigs primarily in the Midale and Huntoon development areas for the balance of 2010.

In January, 10 net Bakken wells were tied to the newly constructed Huntoon area battery and gathering system. The company expects to enjoy reduced operating costs from wells tied into this facility.

Approximately 75 per cent of the drilling, completion and equipping costs in 2010 are targeted for light oil operations.

Lastly, with over 1,200 drilling locations in southeast Saskatchewan PetroBakken intends to increase its 2010 production by more than 15 per cent over the next year.

PetroBakken currently has 13 drilling rigs operating in southeast Saskatchewan, 11 rigs are drilling Bakken development wells and two rigs are drilling conventional oil plays.

This drilling pace results in new producing wells being added a rate of four to five wells per week. The company plans to drill 128 net Bakken wells and 88 net wells in their conventional oil plays in 2010.

Our one-year target on the company remains at $36 per share.

For the quarter, the Jones received $8,084 in dividends from the portfolio. They have also paid their tax-deductible management fee of $5,386, which is one per cent of the portfolio paid quarterly.

Kevin Johnston is a senior wealth adviser and director of wealth management at ScotiaMcLeod in Regina. The opinions stated are not necessarily those of ScotiaMcLeod, a division of Scotia Capital Inc. a subsidiary of the Bank of Nova Scotia.

Source: Leader Post

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