Canada, the New Frontier in Non-OPEC Oil and Gas
  from: AXcess News
  Friday, October 27, 2006

Canada has suddenly become the new frontier in non-OPEC oil and gas developments and for good reason. Russia, the world's largest non-OPEC producer, has rumbled about taking over the huge Sakhalin II field while OPEC itself cut back production over 1.2 million barrels a day, increasing the demands on non-OPEC producing countries even more. This has put new emphasis on friendlier non-OPEC countries where both major and minor energy companies can go.

Royal Dutch Shell Plc's recent $7.7 billion bid to buy out the 22% of Shell Canada Ltd. it doesn't own may have been fueled by insecurity toward Russia's Sakhalin II field and lower oil prices, considering the oil sands development held in Shell Canada.

Shell Canada and Western Oil Sands just agreed to inject billions into the planned expansion of its Athabasca oil sands project to bring production up to 100,000 barrels per day. Shell Canada estimates the cost to be between CDN$10 billion and CDN$12.8 billion to complete, which has no bearing on Royal Dutch Shell's plans to go ahead with buying control of Shell Canada.

Suncor Energy Inc., the world's biggest oil-sands producer, said third-quarter profit more than doubled on increased output from oil deposits in Alberta.

Chief Executive Officer Rick George said Suncor plans spend at least CDN$3.6 billion to boost oil-sands production to about 350,000 barrels a day in 2008, the year TransCanada's pipeline is expected to become available to push up to 400,000 barrels per day to refineries in the midwestern United States.

Sitting in the middle of all that oil sands development is Patch International, Inc. (OTCBB: PTCH), which bought into the play over a year ago, quietly acquiring prime oil sands leases contiguous to the majors' properties. But Patch's own development has stalled as it awaits regulatory approval on a dividend relating to shares of an unrelated pharmaceutical company that before taxes would give Patch over $9 million after shareholders' dividends.

The junior oil and gas exploration and development company has been busily drilling for oil and gas on other Canadian properties this summer and only recently began giving shareholders a peek into its plans.

Patch President John Thorton said, "This is an outstanding opportunity that holds the potential for tremendous upside for Patch International."

While companies like Suncor and Shell pave the way for upping the rate of production in Canada with multi-billion dollar investments, Patch sits on the sidelines waiting for its turn.