(Daily Oil Bulletin) The Saskatchewan government lowered its 2017-18 fiscal year oil price forecast to US$49.75 WTI, down from $56.25 at budget, according to the first quarter report.
Its oil production outlook has been hiked to 180.1 million bbls from 163.8 million bbls.
Oil and natural gas revenue is now expected at $612.2 million, compared to $670.4 million at budget.
The decline is primarily due to a lower WTI oil price forecast and an increase in the exchange rate, partially offset by an increase in production and a lower light-heavy differential.
A US$1 per bbl change in the fiscal year average WTI oil price results in about a $17 million change in oil revenue.
The light-heavy differential has decreased from 19.5 per cent to the current forecast of 18.5 per cent.
Crown land sales revenue is forecast to increase $27.1 million from budget to $79.1 million, primarily reflecting a larger-than-expected June sale and increased forecasts for the final three sales of the fiscal year.
At first quarter, a deficit of $684.7 million is forecast, unchanged from budget. Revenue at first quarter is forecast to increase $42 million (0.3 per cent) from budget, while total expense is forecast to increase by about $82 million (0.6 per cent).
As planned, part of the budget’s $300 million contingency—about $40 million—is being used to offset expense pressures. A further $125 million of the contingency is being used to offset compensation savings that, because of the time required for negotiations to continue, will not be achieved this fiscal year.
