The Provincial Government has successfully negotiated the terms of an arrangement for the development of the White Rose satellite fields that include a five per cent equity stake for the province in the White Rose satellite developments, and a super royalty of 6.5 per cent on net revenues from those satellites when the price of oil is over US$50 WTI, said the Honourable Danny Williams, Premier of Newfoundland and Labrador.

"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," said Premier Williams. "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 expansion project is subject to the Generic Oil Royalty Regime which was in place when negotiations were underway, plus the 6.5 per cent super royalty, which applies to the satellite fields after net payout has been achieved and when oil prices are over US$50 per barrel (flat). The 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 million barrels of oil.

"This is a significant development for our offshore oil industry and for the supply and service community," said the Honourable Kathy Dunderdale, Minister of Natural Resources. "It also clearly demonstrates that our oil industry partners understand the principles that guide any new development of our oil and gas resources and we look forward to a long and mutually-beneficial relationship with our new partners, Husky Oil and Petro-Canada."

The province�s purchase price for its five per cent equity stake will be C$44 million based on reservoir information available today. This price is subject to due diligence, data verification and the outcome of a well currently being drilled. The province�s energy corporation will pay a processing fee of C$3.50 per barrel of crude it owns.

Based on today�s oil price of approximately US$78 and assuming annual inflation of two per cent, the province could receive total revenues of more than $6 billion from this new extension.

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The Honourable Danny Williams, Premier of Newfoundland and Labrador Speech to the St. John's Board of Trade September 12, 2007

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2007 09 13                                                         12:10 p.m.