Canadian oil - minnows grown to be eaten

So the refinery doesn't have to touch it in some cases and that's where we get a pretty substantial bump. Then you're not subject to pipeline apportion and issues. It just opens up whole new markets for you.

At the end of the day we will get somewhere around $66 or $63 a barrel this month and then we're going to bump that up by another $9 next month by taking all the crude we have in West Hazel by rail. So our netback will be $35 to $40--and that's just the West Hazel crude.

James Stafford: What is the market like for assets right now, from a junior's perspective? What's the ideal prospect?

Chris Cooper : Asset sales are heating up. We are finding that there are a lot of assets being marketed through companies like Sayer and NRG Divestments. There are also several larger brokerage firms representing companies for “strategic alternatives.”

As an example, Aroway just picked up a great producing asset in Saskatchewan for $10,000/flowing barrel. The market for similar assets in Saskatchewan at that time was about $40,000/flowing barrel. Companies need to exercise patience and do their due diligence. Not to mention kissing a lot of frogs to find these types of assets. They are out there.

James Stafford: A lot of North American juniors are hitting the riskier frontiers with all they've got these days—from Iraqi Kurdistan to Sudan, even Somalia. Why are they willing to take this risk and is it paying off?

Chris Cooper: With higher risk comes higher reward, but I don't think it is paying off in the broader sense. Sure, there are 2 or 3 juniors that have hit home runs, but more often than not a junior is going into those types of plays with only $5 or $10 million in the treasury and they blow this after drilling just one well. I have always believed there is great opportunity offshore, but the risks are lower and infrastructure and political stability in North America is in place. There is plenty of opportunity in North America.

James Stafford: Related to this, where do you see Canada's oil and gas industry 10 years from now?

Chris Cooper: I see the oil and gas industry in Canada continuing to grow with the advancement of new drilling techniques and new innovations in exploiting existing pools to increase the recoverability. We have a stable political system in place which enables business opportunity to grow in Canada.

James Stafford: We hear a lot about Alberta, but what kind opportunities are we looking at in Saskatchewan?

Chris Cooper: Saskatchewan is definitely open for business. The royalties paid in Saskatchewan are very low and the production opportunities are very good. We are actively looking for new opportunities in Saskatchewan.

James Stafford: Do you lend any significance to Canadian media reports that the Cabinet is reviewing some new legislation that would set stiff payouts for the oil industry for accidents?