Bakken oil update for Saskatchewan and Crescent Point

February’s sale of oil and natural gas drilling rights in Saskatchewan have smashed the record for single-sale revenues, bringing in a whopping $197 million in bonus bids, more than double the previous record of $85 milllion set in 1994. The overall Bakken oil play is across North Dakota, South Dakota, Montana, Manitoba and Saskatchwan. It potentially is a Saudi Arabia of oil. Estimates for ultimate oil contained in the entire Bakken play range from 271 billion to 503 billion barrels, with a mean of 413 billion barrels of technically recoverable and irrecoverable oil. Saskatchwan could have 25% of that oil.

The focus of attention was the Bakken play, which accounted for more than 80 per cent of the $132 million in bonus bid revenues in the southeast. One company that has been at the forefront of the Bakken play is Crescent Point, a Calgary-based energy trust. “We’re the largest (player in the Bakken) in land and production and facilities and drilling,” said Crescent Point president and CEO Scott Saxberg.

And Crescent Point plans to make the Bakken the focus of its operations again this year. ” In 2008, we’ve budgeted for Crescent Point about $175 million.” Crescent Point is also 20-per-cent owner and operator of Shelter Bay Energy Inc., a privately held oil and gas company, which plans to spend up to $150 million in the Bakken play in Saskatchewan this year.

Extensive details on Crescent Point Energy Trust’s activity in Saskatchewan to exploit the Bakken oil play

Crescent Point is currently the dominant producer in the southeast Saskatchewan Bakken resource play with more than 12,000 boe/d of production. The Trust also has the largest undeveloped land base in the play, with 360 net sections of undeveloped Bakken land and more than 1,000 net low risk Bakken drilling locations representing over 10 years of inventory.

Crescent Point believes the Viewfield Bakken play is the second largest conventional oil play ever discovered in western Canada, containing an estimated 3.0 billion barrels of Original Oil in Place (“OOIP”). Bakken oil reserves are high quality, consisting of 42 degree API light sweet oil and liquids rich associated gas. Crescent Point’s third quarter 2007 Bakken netback was CDN$62.71 per boe.

As part of its commitment to Shelter Bay, Crescent Point will farmout to
the Company 22 net sections of its inventory of 360 net undeveloped Bakken
sections. Under the terms of the farmout agreement, Crescent Point will retain
interests in up to 50 percent of the lands and production, earning cash flow
and reserves on these sections and increasing the Trust’s net asset value with
limited capital requirements. Shelter Bay is expected to drill up to 40 gross
wells on these farmin lands in 2008 and a further 40 gross locations in 2009.

Crescent Point is producing in excess of 33,500 boe/d [2008], mainly due to drilling and fracture stimulation success in the Bakken play.

Between the two companies, about 140 to 150 wells will be drilled in southeast Saskatchewan, and close to $400 million will be spent in the province, Saxberg said.

Another oil play that had attracted bidding aws the Shaunovan heavy oil play which has about 470 million barrels in place