Virden and Wascada will never be mistaken for Fort McMurray but the two small towns are at the centre of an unprecedented oil boom in Manitoba.
Industry officials predict exploration in the Bakken oilfields in the southwestern part of the province will top $1 billion this year, up from $800 million in 2010. Close to 600 wells are expected to be drilled in 2011, one-third of them by Winnipeg-based Tundra Oil & Gas. Historically, between 50 and 100 wells are drilled every year in Manitoba.
Dave Chomiak, minister of innovation, energy and mines, said if you were driving through the area and didn't know better, you'd think you were in the heart of Alberta.
"We've got a mini-boom going on," he said.
It's no secret that rising oil prices are driving the activity because they make the latest in drilling technology economical in a way that it wasn't just two years ago. The most significant advancement is horizontal drilling, where water, sand or carbon dioxide is injected into a reservoir, pushing the oil to the vertical wells.
"It's a renaissance," said Dan MacLean, president and CEO of Tundra.
Each well requires between $1.2 million and $1.5 million of investment. Over the last five years, the oil industry has spent $2.5 billion in Manitoba and drilled more than 2,000 wells.
The situation isn't without its challenges, however. The influx of workers to Virden, population 3,000, and Wascada, population 225, has pushed demand for housing and hotel stays through the roof. It has spurred a couple of hotel developments and some entrepreneurs have even transformed empty buildings into bed and breakfasts.
from Western Investor, May 2011
