Friday, September 21, 2007

Oil Patch Fear Mongering is Very Removed From Reality

Business writers have been hyperventilating over the market impacts of the Hunter Royalty Review Report on oil sands share prices. Globe and Mail today has an example of an over reaction quotes: “Oil companies’ share prices have tumbled on investor concerns that incomes will be adversely affected and make future project less viable.”

A decrease in the TSX in the past day has been blamed on the Royalty Review Report recommendations as well. Horsefeathers! The Globe Index Drags today shows the cause was mostly by Research In Motion, three big Banks and Suncor was the only oil company reported. BTW, the smallest of these stock market "drags" only has a capitalization of over $31B.

Well yes some of the oil stock declined – more of a dip than a “tumble and only for a day. CNRL shares dropped 5.9% on Wednesday and the Chairman is leading the pack from the oil patch against the Royalty Review. BTW he is reported to own about $830,000,000.00 in CNRL stock so a 5.9% hit in one day hurts, "technically" but he is hardly homeless.

For the record CNRL stock rose $.21 or 0.2% yesterday and so far today it is up $1.73 or 2.29%. It has traded in a 52 week range between a low of $40.29 and $78.90. Still trading in spitting distance of its 52 week high is hardly a disaster for the company and its investors.

Albertans need to be sure the oil patch rhetoric over the veracity of the Royalty Review Report calculations tempered and evidence based. The facts need to be protected from the fantasies and the tenants need to start rethinking their roles and responsibilities to the resource owners…and show the owners a little respect too. They are citizens and therefore - voters. come to think of it, these same citizens may be shareholders in Alberta-based oil companies where they are voters too.