The villlage of Wescadia has only 225 residents but, like the neighbouring town of Virden, it finds itself at the centre of an unprecedented oil boom in southwestern Manitoba.
Industry officials predict exploration in the giant Bakken oil fields will top $1 billion this year, up from $800 million in 2010. A record 600 oil wells are expected to be drilled in 2011, a third of them by Winnipeg-based Tundra Oil & Gas. Historically, between 50 and 100 wells are drilled annually in all of Manitoba. Dave Chomiak, Manitoba Minister of Innovation, Energy and Mines, said that if you were driving through the area and didn't know better, you'd think you were in the heart of the Alberta. "We've got a mini-boom going on," he said.
It is no secret that rising oil prices are driving the activity because they make the latest in drilling technology economical in a way it wasn't 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 renassiance," 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, however, is putting a strain on Wescada and Virdin. An influx of workers has pushed demand for housing and motel rooms through the roof. It has already spurred two hotel developments, and some entrepreneurs have even transformed empty buildings into bed and breakfasts. Virden, with a population of 3,000, is taking the brunt of the boom.
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