OIL AND GAS HAS NEAR-RECORD YEAR

Energy and Mines Minister Eldon Lautermilch today announced the
Saskatchewan oil and gas industry finished 1996 by posting near-record
numbers for wells drilled and licences issued.

There were 2,840 oil and gas related wells drilled in 1996, a 34 per
cent increase over 1995 and the second-highest number on record. The
number of licences issued in 1996 reached 3,375, representing a 44 per
cent increase over the previous year and also moving 1996 into second
place in the record books.

The Estevan area led the way in total activity with 813 wells drilled
and 980 licences issued. However, the Swift Current area posted the
greatest activity growth over the previous year with increases of 50
per cent in wells drilled and 58 per cent in licences issued.

While drilling numbers are slightly less than the all-time highs set in
the mid-1980s, current oil production levels are nearly double the
levels attained in those years. This paradox is due to the relatively
new use of horizontal drilling, a technique that enables the recovery
of greater amounts of oil with fewer wells.

"Taking this difference into account, one could well argue that 1996
was actually a better year than the mid-'80s," Lautermilch said.

Oil production during the first three quarters of 1996 reached 15.2
million cubic metres (95.7 million barrels), about 10 per cent ahead of
1995 numbers for the same period. While the fourth quarter numbers
have yet to come in, the trend established in the first nine months of
the year indicates the all-time oil production record of 117.5 million
barrels set in 1995 will be exceeded by roughly 10 million barrels.

"It means more people in Saskatchewan are working, increased sales for
businesses and more tax revenues for governments to help pay for public
services," Lautermilch said.

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For more information, contact:

Marg Moran McQuinn
Energy and Mines
Regina
Phone: (306) 787-2567