I can’t say I always agree – or even agree very often - with fellow Alberta Blogger Eugene Plawiuk. But Boy oh Boy I have to admire his work on the post he just did on the Royalty Review Report and reaction to it.
This post is an example of the Blogosphere at its best. Great piece of work Eugene – I will read it carefully and with great interest - once I finish the report itself.
For those outside of Alberta - I suggest you will want to read the Royalty Review Report too. 60% of the billions being invested on oil sands development gets spent outside Alberta in the rest of Canada.
Sunday, September 23, 2007
Saturday, September 22, 2007
Claims of Oil Royalty Review Causing Market Meltdown is Bogus
Another update on oil patch stock market fear mongering from the Hunter Royalty Review Report is in order. The Royalty Review Report came out on Tuesday and the next day business press was rife with quotes and claims of a draconian disaster and a “tumbling” market for the energy sector
Yes there was a dip in some stock prices reported for companies like CNRL and Suncor. Well by Friday, in the face of a $.51 cent drop in oil prices the G&M reports that CNRL and Suncor were ranked #3 and #4 in the Market Lifter Index. The TSX was up 101.64 points on Friday and these two companies were jointly responsible for about 16 of those points.
As for CNRL –it shed 5.9% of stock value on Wednesday and on Friday the stock was up $1.64. Meaning it had recovered all but 1.5% of that pre-Royalty Review Report value decline in only two trading days and it is trading at $76.84 - only $3.14 off its 52 week high.
Some melt down.
Yes there was a dip in some stock prices reported for companies like CNRL and Suncor. Well by Friday, in the face of a $.51 cent drop in oil prices the G&M reports that CNRL and Suncor were ranked #3 and #4 in the Market Lifter Index. The TSX was up 101.64 points on Friday and these two companies were jointly responsible for about 16 of those points.
As for CNRL –it shed 5.9% of stock value on Wednesday and on Friday the stock was up $1.64. Meaning it had recovered all but 1.5% of that pre-Royalty Review Report value decline in only two trading days and it is trading at $76.84 - only $3.14 off its 52 week high.
Some melt down.
Does Harper Have Any Sense of Humour?
Jane Taber of CTV and the Globe and Mail notes in her Hot and Not column this morning that Prime Minister Steve is rumored NOT to be attending the annual Press Gallery Bun Throw…AND in the PMO best Faux Fascists form, he has ordered all his Cabinet Member NOT to attend either.
Guess what all the dinner jokes are going to be about now. Guess which political leader will bear the brunt of the most barbs. Expect CPAC to tape it and rerun it more times than the Cons ever did for their paid for negative TV ads on Dion. No doubt the MSM media will run clips and the caricatures too.
Harper has been PM about 2 years now. He should know by now the “Parable of the Press” is that they giveth and they taketh away. The Cons being a total no-show at the Press Gallery Dinner is definitely Not Hot Steve. The Gallery will be sure to get even if you don't come out and play with them.
Besides a bit of humorous self-deprecation about now would be good for The Steve don’t you think? He may need it when Jack Layton sends him a reminder since their by-election win in Quebec the Dippers now have enough votes to save or cave the Cons. I wonder what Jack wants to see in the upcoming Throne Speech. I wonder if Harper shares my curiosity?
Guess what all the dinner jokes are going to be about now. Guess which political leader will bear the brunt of the most barbs. Expect CPAC to tape it and rerun it more times than the Cons ever did for their paid for negative TV ads on Dion. No doubt the MSM media will run clips and the caricatures too.
Harper has been PM about 2 years now. He should know by now the “Parable of the Press” is that they giveth and they taketh away. The Cons being a total no-show at the Press Gallery Dinner is definitely Not Hot Steve. The Gallery will be sure to get even if you don't come out and play with them.
Besides a bit of humorous self-deprecation about now would be good for The Steve don’t you think? He may need it when Jack Layton sends him a reminder since their by-election win in Quebec the Dippers now have enough votes to save or cave the Cons. I wonder what Jack wants to see in the upcoming Throne Speech. I wonder if Harper shares my curiosity?
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.
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.
Thursday, September 20, 2007
Please Premier Stelmach - Do Not Delegate Royalty Issue to Energy or Finance
Then Stelmach says “… the two Ministers will bring that forward to caucus.” It is the latter comment that scares me.
It would be prudent for the Premier to be personally in on any and all meetings with the oil industry. He needs to hear first hand what they have to say. It would also be appropriate for the details of the oil industry problems and presentation materials to be released publicly too…ideally in advance so the resource owners can know what the industry has problems with and why.
It would be prudent for the Premier to be personally in on any and all meetings with the oil industry. He needs to hear first hand what they have to say. It would also be appropriate for the details of the oil industry problems and presentation materials to be released publicly too…ideally in advance so the resource owners can know what the industry has problems with and why.
This is not the stuff of deal making behind closed doors, In fact as a show of good faith it would behove the oil industry representatives to go a step further and act as if the Lobbyists Act was already in force and make every effort to voluntarily comply over their issues.
There are indications in the Royalty Review Report that the Department of Energy had difficulty being forthcoming with the Review Panel because their data was seen as unreliable. The Royalty Review Report is reported as saying the Department of Energy is in a difficult conflict position because it wears so many hats. For those reasons alone it would be advisable for the Premier to keep control over this file and not delegate it to Energy but keep them involved.
As for delegating it to Finance that too would be a mistake. One has to merely remember the current Minister was once kicked out of the PC Caucus for making up stories about knowing where there were alleged "skeletons." Has he even kept his promise to disclose his leadership campaign contributions – and it has been 10 months. The Premier would be legitimately cautious about the credibility of any briefing from that Minister about such a critical aspect of Alberta’s future.
There are indications in the Royalty Review Report that the Department of Energy had difficulty being forthcoming with the Review Panel because their data was seen as unreliable. The Royalty Review Report is reported as saying the Department of Energy is in a difficult conflict position because it wears so many hats. For those reasons alone it would be advisable for the Premier to keep control over this file and not delegate it to Energy but keep them involved.
As for delegating it to Finance that too would be a mistake. One has to merely remember the current Minister was once kicked out of the PC Caucus for making up stories about knowing where there were alleged "skeletons." Has he even kept his promise to disclose his leadership campaign contributions – and it has been 10 months. The Premier would be legitimately cautious about the credibility of any briefing from that Minister about such a critical aspect of Alberta’s future.
I hope you proceed with caution Mr. Premier and hear out the industry concerns. They better are based on facts supported by current evidence and not on a 1997 report like in the earlier presentations of some industry submissions to the Royalty Review Panel.
And please Mr. Premier, what ever you do, get your information on this critical issue first hand.
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