Anyone who has found a long-lost wad of bills in a coat pocket will attest that there are few things better in life than found money.

Residents of southwestern Manitoba would certainly agree, having just found out that $5 million in unexpected investment will come their way in 2008, courtesy of Canadian Natural Resources Ltd. The Calgary-based oil and gas giant has decided to double its investment in the oilfields in and around the town of Virden, located west of Brandon, to $10 million from $5 million.

The found money aspect to it is that the provincial government didn’t twist the company’s arm, farmers near Virden didn’t offer to give CNRL their land for free and there were no tax breaks to be had. In fact, nobody in Manitoba engaged in any kind of sweet talk whatsoever.

There is, however, a war of words being waged in Alberta, the effects of which have trickled both east and west. The government in that province recently announced plans to hike its royalty take from the oil and gas sector by 20%, beginning in January 2009. That has prompted CNRL to roll back its capital spending in Alberta to $4.5 billion from $4.9 billion and invest the difference in British Columbia, Saskatchewan and Manitoba.

“We’ve operated in Manitoba for several years,” says Lyle Stevens, CNRL’s senior vice president of exploitation. “Oil prices are high and there are good opportunities there.”

The increased investment will enable the company to drill 15 new wells in Manitoba in 2008, up from seven last year.

The optimism is infectious. Roland Moberg, president and CEO of Winnipeg-based Tundra Oil & Gas Ltd., the biggest local player in Manitoba’s oil and gas sector, says Tundra made a nine-figure investment in drilling at the Sinclair oilfields, just west of Virden, in 2007. He wasn’t ready to release Tundra’s predicted activity for this year, but it’s safe to say there won’t be any slashing of its budget.

“It’s the best of times now in Manitoba,” he says, “the best it’s been in half a century.”

A major reason for that is because the geology in Manitoba is “oil-prone,” says Don Herring, president of the Canadian Association of Oilwell Drilling Contractors. With continuing high oil prices, the heavier crude produced in the province — which requires more refining than lighter crude found in Alberta — becomes more economical.

“Manitoba will benefit from the Alberta government’s royalty review initiative,” he says.

Meanwhile, the Canadian Association of Petroleum Producers says many of its members will take several months to understand fully the implications of the new royalty structure in Alberta, according to David Price, vice president of the association’s western Canadian operations.

“They’re asking, ‘Is there some place where I can invest dollars when I’m not prepared to take the risk on Alberta?’ That’s where Saskatchewan and Manitoba can realize at least a short-term benefit,” Price says. “It’s relatively easy to marshall resources and people into those jurisdictions.”

But finding these companies a place to hang their hats is proving to be more challenging. Virden’s mayor, Bruce Dunning, says the town and surrounding area have been hopping for the past two years as oil prices have continued to hit record highs.

“We have absolutely no housing available for people wanting to come in,” he says.

Developers are answering the call, with three projects currently underway and another two in the works, he says. There has been more than $4 million worth of development within the town’s limits over the past 12 months — more than quadruple the activity from just two years ago.

Virden has another enviable problem, Dunning admits: an unemployment rate that’s effectively zero. All the manpower required for the drilling and exploration work is being found in the restaurants, shops and other businesses in town. IE