Province, Husky agree to royalty, equity terms

Newfoundland and Labrador's provincial government has negotiated the terms for developing the White Rose satellite fields in the Jeanne d'Arc basin off the province's east coast.

Offshore staff

ST. JOHN'S, Newfoundland and Labrador -- Newfoundland and Labrador's provincial government has negotiated the terms for developing the White Rose satellite fields in the Jeanne d'Arc basin off the province's east coast. The terms include a 5% equity stake for the province in the White Rose satellite developments and a super royalty of 6.5% on net revenues from the satellites when the price of oil is over $50 WTI.

"Our officials have been negotiating with representatives of Husky Oil throughout the summer for a royalty and equity arrangement for the extension of the White Rose oil field, and I am pleased to confirm that we were able to bring those negotiations to a successful conclusion," the Honorable Danny Williams, premier of Newfoundland and Labrador, said in a speech to the St. John's Board of Trade on Sept. 12, 2007. "This agreement achieves the province's fundamental principles of equity and improved benefits for the province and continues the positive relationship this government has with partners Husky and Petro-Canada."

The new royalty and equity arrangement will apply to the development of oil from the White Rose satellites, including fields known as South White Rose, North Amethyst and West White Rose. Husky estimates that these fields contain 214 MMbbl of oil.

Based on today's oil price of approximately $78 and assuming annual inflation of 2%, the province could receive total revenues of more than $6 billion from this new extension.

9/13/2007

More in Regional Reports