The hamlet of Sinclair, population 40 on a good day, went from being battered by bottoming grain prices and the BSE (bovine spongiform encephalopathy) crisis to a community buoyed by the discovery of Manitoba's largest light-oil field since the 1950s.

A year ago, Tundra Oil and Gas Ltd., a Winnipeg-based company privately owned by James Richardson & Sons, Ltd., did some seismic testing in the southwest corner of the province.

Upon some exploration, it was discovered that in the spot where decades earlier another company drilled too deep and came up empty, there was indeed a significant reservoir.

Still in development, Sinclair Field already has 213 wells licensed and close to 150 in various stages of production. Because of this, Sinclair, 300 kilometres from Winnipeg near the Saskatchewan border, may soon become home to a few new millionaires, including 69-year-old widow Helen Dittmer.

Chris Graham, Business Edge
Pipestone RM Reeve Karen Caldwell sees a bright future for the hamlet of Sinclair after oil was struck in the area.

Before Helen's husband died in 1994, one of his last directives was never sell the mineral rights on their 800-acre farm, as he had a hunch that there was crude oil underfoot.

He was right - the farm now has two wells and may have as many as 20 in total.

The mother of eight received a one-time payment of $130,000 for the surface rights, and in addition, will receive an annual cheque for $46,000 each year the wells produce. Because she held tight to the mineral rights as per her late husband's wishes, she will also receive 15-per-cent royalties on all the oil that comes off her land.

"Helen Dittmer is at the high extreme of what this means to us," says Karen Caldwell, reeve of the Rural Municipality of Pipestone, where Sinclair is located. "We're not all getting that rich, but it's definitely given a boost to a lot of people.

"It may not be in the millions, but even if you have one well put on (your land), that's extra cashflow coming in to your pocket."

Caldwell says that the municipality, which also owns some mineral rights, has always had a good tax base mainly because of other drilling operations within its boundaries.

But she admits, in the wake of the agriculture crisis before Tundra's discovery, there was concern whether it was feasible for locals to continue farming in the area. But now things have turned around.

"The immediate impact, I would say, has been optimism," Caldwell says. "It creates opportunities that were not there before for the guys that want to stay farming, but need extra income to get through. Now they can do that without having to leave their family."

The oilfield also offers a solution for the future of this rural community.

"As a council, one concern we've been trying to address is what we can do to keep our young people here or once they go to school and get an education, how we get them back," she explains. "So, I think the oil's a good thing. Young people don't have to go to Alberta if they want to work on the rigs - they've got it in their backyards."

Jim Chliboyko, Business Edge
A work crew assembles one of the wind turbines that will dot the landscape around St. Leon, Man.

Caldwell says she hopes the wells in the community, initially producing an estimated 50 barrels per day each, will not only be a boon to the economy but help boost the population.

"There's always going to be a need for maintenance and the people that supply the oilfields, and I'm hoping that we can attract those types of businesses," Caldwell adds. "I'm hoping that once we get the population built up, you'll find one spouse working directly on the rigs or in the Tundra office and the other spouse will be (employed) or start a new business here."

Tundra president Roland Moberg says that the philosophy of the company, now Manitoba's leading driller and producer with more than 32 per cent of the province's total oil production, has always been to share its found success with the people who own the land.

"I really think that the people who are impacted by any development need to see that there are some benefits going back to the community," he says, explaining that he'd much prefer to see a local landowner receive the financial windfall than send royalty checks to some rich broker in a distant city.

"Think about the impact on a farmer who actually owns the land and he's also got the mineral rights. We go in, drill the wells, and pay him a front fee for agreeing to let us build and run a lease on his land," Moberg explains. "Then we pay an annual fee for as long as we operate that well. If he has the mineral rights, he's going to get 15 per cent straight off the top of any revenues coming from the wells on his land.

"Now look at the situation where somebody in Denver or Calgary owns the mineral rights. The farmer has someone muck around in his fields, drill, build pipelines and so on.

He gets a portion of the benefits, but then someone else comes in and (scoops up) the majority of the royalties from the mineral rights. It's much more likely that that creates resentment."

The latter scenario is not the case in Sinclair, which may be home to a five-year program, assuming continued success.

In fact, at the Oct. 13 opening of Tundra's new battery, a processing facility that separates crude oil, salt water and natural gas, Moberg says people were "very, very positive" and eager to find out if they would soon be coming to drill on their land.

"We're very fortunate, as there's roughly a 50-50 split between Crown land, from which the royalties go to the Province of Manitoba, and the freehold mineral owners - many of them still live in the area. That means those dollars will go to people in the community, and they will, in turn, spend the money locally."

Jim Chliboyko, Business Edge
An 80-metre wind turbine towers above the town of St. Leon, Man., giving local inhabitants hope for the future.

Caldwell says that she has seen some new cars in town and a few new houses constructed - at least one of them built as a direct result of Tundra's discovery.

"It's good for the economy because when people have that income and know it's going to be coming in, they're more willing to spend. We have a good community that tries to buy locally before they go elsewhere."

Another farming community benefiting from the recent discovery of a valuable commodity - this time wind, not oil - is St. Leon, 150 kilometres south of Winnipeg on the Pembina Escarpment.

The $187-million St. Leon Wind Energy Project will feature 63 massive wind turbines on 51 farms across 28 sections of land.

It is designed to harness wind power and generate 99 megawatts of electricity, enough for Manitoba Hydro to power 35,000 households. It is expected that the project will bring in $45 million in revenue through property, income, capital and taxes over the next two decades.

It is reported that St. Leon landowners who have consented to have the 80-metre turbines on their land stand to reap a total of $9 million over the next 25 years.

Paul Grenier will have three turbines erected in his field, in the middle of what he has dubbed the wind capital of Manitoba. "We're in grain, oilseeds and hog farming - and now wind. I call it the new cash crop," Grenier says.

The project is owned by AirSource Power Fund, a subsidiary of Oakville, Ont.-based Algonquin Power Systems Inc., which is also overseeing the construction management.

"St. Leon Wind Energy has been highly involved with landowners during the construction phase of the project and anticipates strong growth of this partnership throughout the future," says Dave Kerr, executive director of Algonquin Power.

"The early-stage involvement of the community has been critical in building success around the project and providing the basis for future opportunities within the region."

Kerr says that the benefits to the landowners and community are just as important as the obvious economic advantages of producing and selling power.

"Job creation, long-term payments for land usage and municipal tax payments by the facility are just a few of the positive effects in the community."

Grenier says he and his neighbours are already feeling re-energized by the project.

"With all the rain we've had in southern Manitoba, it's been a very tough year to make a living in agriculture. That's why I call the wind farm our new cash crop. It'll be a major boost for the whole area."

(Barbara Chabai can be reached at chabai@businessedge.ca)