Receivd this promising message today. Things are looking up

Vitally Correct Policy Changes Announced


Clearly, the resurrection of Quebec’s former state oil company SOQUIP and a new “Ressources Quebec” fund of $1.2 billion is proof that a “Quebec Inc.” down payment for the projected private investment of $80 billion over 25 years “Plan Nord” (North of lat. 50) – for both mining and hydrocarbons speaks to the government signaling that it will be more than ready for a true oil and gas exploration and production / service industry after the Strategic Environmental Assessment re shale gas reports in late 2013. That report might come sooner than later.

Natural gas imports to QC are stated to be $15 billion per year; the QC govt. is supporting a study looking to extend Gaz Metro natural gas line to Sept Iles, which would cost $750MM;

New land regulations in oil and gas: QC is going to an auction system of Crown lands like that in Alberta and BC;

Re offshore Gulf of St. Lawrence, the budget states that QC will create royalty rates and rules, now being studied with the goal of being consistent with Newfoundland and Labrador. This telegraphs that SOQUIP and Nalcor will be partners in the massive Old Harry structure (Corridor Resources) after all.

Much higher annual fees, shorter lease times (were 10 years) is what was lacking --- now clearly QC is getting ready for an oil and gas drilling boom starting in 2014, driven by Quebec Inc.

Depending on when the Premier goes to the Lieutenant-Governor, all this could be fast forwarded by one year -- to spring of 2013.

So those who pick up oil and gas acreage and/or interests in QC companies now will be doing so at a small fraction of what it will cost to do so not that long from now. Junex - JNX – V was up 16% today. Corridor is at 99 cents is well off its lows of 70 cents but still down over 90% from its all time high.

In our opinion, the worst is well behind the oil and gas sector in Quebec. Our view is that first drilling will occur in Utica Shale Anticosti Island (281 residents) which has important similarities to the rich wet Utica shales in Ohio; and the island and is well North of 50°.
Junex, Corridor, Petrolia are the Anticosti Island players.

March 21, 2012

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