08/03/2012 01:07 EDT | Updated 10/03/2012 05:12 EDT

Saskatchewan takes hit from drop in oil, land sales, but still forecasts surplus

REGINA - The Saskatchewan government's finances have taken a hit from a drop in oil revenue and Crown land sales.

The province says in its first-quarter financial report that overall revenue is forecast to be down $113.2 million from the March budget.

The drop in non-renewable resource revenue is forecast at $245.8 million.

But the province says that will be partially offset by increased tax revenue, more income from the Saskatchewan Liquor and Gaming Authority and an increase in federal transfers.

The budget projected a surplus of $95 million and, by law, half of any surplus has to be transferred to the province's rainy-day fund.

The first-quarter financial report forecasts the surplus to instead be $11.8 million.