Going great guns

[cowman]

Looking out my front window this morning I can see three rigs working and quit a few on the other side of the house! Shes rocking and rolling around here without a doubt!...and as one old coalbed boy told me...you ain't seen nothing yet!
Now consider this: Two of the rigs are on one quarter one half mile south of me. Probably the leases are in that $12,500 range each(they share a road in) with a yearly rental of $2700 each or $5400? The owner is a straight grain farmer...although I doubt that is his main income...probably hasn't been for years...he invests in the stock market?
Now if he takes his $25,000 leases and invests it wisely he should easily get another $2500 a year to go with the $5400 in yearly rental for a total yearly income of $7900 or roughly $50 an acre? And we haven't even considered the pipelines!
Now I suspect he got in that 90-100 bushel range of six row feed barley this year. It is still sitting in the bin and it could be a little tough so don't know what it is worth? If he got $2 a bushel(which he won't) we are looking at a gross of $180-$200? He buys his seed treated, cleaned etc. and he doesn't spare the inputs! He has modern JD equipment including an airseeder, big combine, new swather last year. Now I'm not up on all the costs but I suspect his net on that barley crop isn't all that rosy?
So bottom line: For two little 10ft. by 10 ft. plots(those coalbed wells don't take any room) he gets more than $7900(remember the pipelines) and for the rest of the quarter...I doubt he gets anything? Maybe he should be begging the coalbed boys to punch another dozen holes in the ground?
Everybody likes to roast the oil companys, but the fact is a lot of farmers would be tits up without the lease/royalty check...at least around here?

[ivbinconned]

Good for him! I hope some day they will punch a few on Horse's land, and mine too.

[SASKFARMER3]

I agree good for him. I would love for them to drill on any of our 45 quarters hell Id even take one quarter off for free rent. We have minerals on 12 of them.
They sunk 1 well 3 miles away then cap it and 8 north and did the same some thing is up but these I think were test holes.
But in Dear old Saskatchewan as long as we have a NDP Government that thinks Regina is King and the rest is just prairie we will not develop this resource. I am sorry it doest just stop at the ALBERTA border and Begin again in Manitoba and North Dakota.

[ivbinconned]

Prairie Centre Policy Institute
Weekly Commentary

WHERE DO WE GO FROM HERE October 27, 2003

Title: Capital Punishment?

If Saskatchewan is to grow and be prosperous, it must be capable of attracting private investment capital. And you don't have to be an economist to know that it is virtually impossible to attract investment when you keep biting the hand that feeds you.

A healthy private sector and business friendly environment are often the first things the private capital market looks for when allocating their investment dollars. They tend to shy away from Saskatchewan, where investment funds are often allocated by the government rather than the market. Investors don't like it when politics replaces return on investment as the basis for allocating funds. The problem with government intervention is you end up with investment projects that often reduce rather than enhance wealth because resources are wasted on political boondoggles like Spudco, mega bingo, the land titles registry and other such expenditures that seem to be favoured by the current NDP administration.

No where is the effect of government intervention more evident than in the Western Canadian oil patch. For years we've been told that Alberta is wealthy because it has oil and gas. And, as you can see from the attached map, that statement appears to be absolutely true. The oil and gas fields do stop abruptly at the Saskatchewan border. The question is, however, do they stop because: a) that's where the oil and gas ends; or, b) the industry does not want to
invest in Saskatchewan.

Obviously, it's investment and not the resource that ends at the border. In fairness, I must point out there is a difference between the geological formations of the two provinces. As a result, the sweet light crude oil found in Alberta is worth more and costs less to recover than and the heavy crude found in Saskatchewan. But, that is not necessarily the main cause for the cut-off along Alberta's eastern border. According to industry insiders, the real culprit is Saskatchewan's Oil and Gas Conservation Act.

This Act gives the minister responsible absolute power over the oil and gas industry. It states, in part, that the minister has exclusive jurisdiction over all matters pursuant to this act. It also says the minister may reconsider any matter that has been dealt with and rescind, alter, amend, suspend or confirm any decision or order made, approval granted, or permit or license issued. Furthermore, there is no appeal from an order or decision of the minister and all decisions, findings and orders pursuant to this Act are final and conclusive. They are not reviewable in any court of law, and no decision, finding or order of the minister shall be restrained by injunction, prohibition or other proceeding or be removed by certiorari (appeal to a higher court) or otherwise by any court.

Now, Minister Cline has stated he would never use this power and I believe him. But, I'm not a big investor either. It has been widely reported that many of those who do have the capital and desire to invest purposely avoid Saskatchewan. The reasons for this are closely related to the perception that public policy in this province is largely :lriven by a long-standing contempt for capitalists and private sector investment. Success is a dirty word and we don't want any of that here. This anti-business attitude was ignited by the 1933 Regina Manifesto, which created the CCF



along with their now infamous declaration that they would not rest content until capitalism was eradicated. Fuel was added to the fire when the CCF joined with the labor unions to form the NDP. It was in full fury when a Saskatchewan NDP government nationalized the potash industry by expropriating private property. And, this sentiment is not exclusive to New Democrats. Given its political history, no wonder investors are more than a little reluctant to put their money in Saskatchewan.

I read somewhere that any government that destroys capital markets will pay a severe price for their folly. thats Capital Punishment?

AI/an Evans


Allan Evans is a marketing consultant and Business Manager for the Prairie Centre Policy Institute. .Where Do We Go From Here" is a feature service of the Prairie Centre"

[SASKFARMER3]

Most rural Saskatchewan wants change the fake Gov Jobs in Regina and Saskatoon are the ones who want status quo, I just hope in my life time before they destroy the rural economy completely we get rid of them and finally see prosperity.
Its amazing though some of Saskatchewan's richest people in Regina Vote NDP, Maybe they have been on the take for years and that's how they got rich?

[Horse]

IVBC I actualy have 3 wells on my property but that dont change the fact the oil industry is the old boys club to be envied.
I hope the sask gov if that is the problem holds on and gets a decent return for the sask citizens But I think it is more as you said oil is cheaper to get in alta with almost no return for the citizens at large, sooner or later they will come if there is anything there
Look at venuswala they put the royalties up some thing like 40% and are still producing , I think $17 per barel with an unstable gov as compared to here at $4 guess it is like the Girl that gives it away gets lots more customers than those that charge for it.
Ihave A nephew that just went to kazakastan and they are in harms way plus there has been a lot of money not paid to oil co in that region of the world but they are still driling so you think Sask is worse I think you must be the pesimist not me after all.
I think most of the different of opinions on this forum between a lot of you and me is that I derive all of my income for the past 35 yr strictly from the fanr if I do some thing it has to pay because I dont have a large off farm income to draw from and that in my opinion changes the way I look at things.

[Horse]

PS I am invested in SASK in the pasqua hills or now Can West Petroleum in a small way but I have faith when the easy oil is gone they will show up on your doorstep.

[cakadu]

Where on earth are investments making 10%. That is a pretty rich estimate of income off of $25000, unless you know something or someone the rest of us don't, cowman.

Isn't it also a big assumption that he will put the money into an investment? Part of the reason producers are tripping over themselves to sign leases, some without really knowing what they are getting themselves into over the long term, is because they are pretty much desperate for money.

[SASKFARMER3]

Id have to agree to some what farmers are so out of cash that when the oil reps come they fall over them selves to get it signed and the first check.
On the investment side one client of mine made $14,000.00 on a $90,000.00 investment last year. Hey it happens.
Now HORSE I make 92% of my income from the farm and yes we watch every penny I mean every penny that goes in and out of our farm so dont think your unique.

[ivbinconned]

All my income comes from 7 quarters of land and the ag related custom work I have done. Did it to cheap, wore my equipment all out...now it is all gone.

I suspect your operation horse, is bigger than mine. Not that big helps!!

Some wisdom I learned from my daughter was this...if you do not have high expectations...you won't be disapointed. Although she was refering to relationships...I guess that is what we have with our governments. But I point out...it is ALWAYS, on their terms!

And as far as I can tell they scheme...so as not to pay.

I have never participated in all the farm programs, not even crop insurance. Not NISA, not CAIS, I just wanted to farm the land...not the programs. This stuborn mind set has had an impact on the decisions I have made and has made for a very efficiant, low risk way of doing things, and limited my frustrations.

[cowman]

Linda: Well I don't think this guy intends to get a GIC or term deposit? I think I mentioned he plays around in the stock market? According to what he tells me he does very well at it....well over the 10% mark on many stocks. I don't know if you ever read the stock investment guy in Grain News? He always seems to do very well?
Horse: What is this? Here you sit and rip the evil oil companies and it turns out you have three wells and invest in oil companies!!! We have found the enemy....and it is us?

[cowman]

HMMM...Just reading over that last thought...Horse do you maybe have a nice little Crown lease tucked away back in those hills too?

[ivbinconned]

Maaaybeee...weeevveee bin conned!

[Horse]

One well on this land was the 642 well drilled in alta and it paid $150/yr for over 40 yr now it pays 3500 for a battery site one is in the process of beeing abandoned and the other pays 2500 but with all that said the oil co are still riptng the alta public . And boy do I wish I had a few 1/4 of lease it would be nice to have summer pasture for $10 or $2/mo I would even probably buy some cows to put on it.
I hear on radio this morning in Sask they are looking for $200,000,000 to put the crop in now given the price of grain why does anyone want to put a crop in ? Why are these subsidys or programs always tied to production why not a set aside program or a per 1/4 payment them we could deside if we want to chance it [ of course I am speeking for all farmers not just those in Sask] because stupid ideas are not limited to Sask.
IVBC you still have more land than I but that dosent matter I have made a living on my 900 acres and I am not going to try to set the world on fire now Its been a strugle but that is behind me now and I now have more time because I figured it out that ferming is like trying to cut a hole out of a blanket.

[grassfarmer]

Cakadu, 10% is by no means a large return by the standards of the last couple of years. There are plenty stocks portfolios that turned close to, or over, 20% mainly off the back of high energy stocks. It's interesting how the old fashioned investments (in bank accounts and bonds) have performed so poorly in the last few years. Bank stocks on the other hand have probably been the next highest earners after the energy sector. There must be a parallel there with low beef prices to producers and excellent returns to the packers!