Finance Minister Tom Marshall, seen during a budget briefing last March, says Newfoundland and Labrador expects to post a modest surplus at the end of the 2010/11 fiscal year. ((CBC) )

Newfoundland and Labrador reported Tuesday that it expects to end the fiscal year in the black, thanks to better-than-expected oil production and revenues.

Although the government had expected in its March budget to run a deficit just over $194 million, Finance Minister Tom Marshall said the government is now on track to finish the fiscal year with a surplus of $12.3 million.

"The province is in a solid financial position, particularly considering the challenging fiscal situations in which many jurisdictions around the world find themselves in the wake of the global recession," Marshall said.

"Our government set a course and made its way through the downturn, and the province has maintained a positive economic and fiscal outlook as a result."

Revenues are about $303 million higher than expected, with about $65 million of that coming from oil.

Oil production in the three fields off Newfoundland's east coast increased their production by about 12.1 million barrels above budget targets last spring, the government said.

The update comes just three days before Danny Williams is to resign as premier and retire from political life, and as the government stares down the province's physicians in a long-running pay dispute.

Marshall said no one should expect the government to turn on the taps for extra spending.

"We must be ever vigilant in managing our financial resources and our spending in a prudent and sustainable manner," he said.