Royalties and real estate values

[MarkTorgerson]

Don
Now that the Royalty Review has some hard numbers attached to it (1.4billion), what type of impact do you feel this will have on the Alberta economy and hence the values of real estate? I know of energy companies that had 3 different budgets dependent on the royalty announcement.

Thanks
Mark Torgerson

 

[DonCampbell]

Hi Mark,

We have been discussing this important issue in other threads so rather than repeat all of the detail, I used the Quick Search button on the topleft of this page and typed in Royalty. It uncovered all of the threads that i think you`ll find very interesting

I trust you heard my complete Royalty fall-out explanation at this month`s REIN Workshops as well, if not it will be on the Monthy CD`s.

It will be an interesting few months for sure as companies do the math and see what is real and what their options are. The sad part is in this transition, employees will be used as pawns. As I said in pervious posts and at the Workshops... I wonder what the next `doom and gloom` scary monster will be on the horizon. Does anyone even remember the predictions of Alberta`s housing market to crash because of rent controls... I don`t think so. Nor do most people remember how KYOTO was going to kill our market in 2001 and 2004. Sad how many things are taken out of proportion putting panic into investors who don`t look at the world and national economics.

Here`s the link. I recommend you start with the Oil & Gas Discussion thread and start at the end and work backwards. Enjoy:

Royalty Discussions

 

[MarkTorgerson]

QUOTE (DonCampbell @ Oct 26 2007, 10:20 AM)
Hi Mark,



We have been discussing this important issue in other threads so rather than repeat all of the detail, I used the Quick Search button on the topleft of this page and typed in Royalty. It uncovered all of the threads that i think you'll find very interesting



I trust you heard my complete Royalty fall-out explanation at this month's REIN Workshops as well, if not it will be on the Monthy CD's.



It will be an interesting few months for sure as companies do the math and see what is real and what their options are. The sad part is in this transition, employees will be used as pawns. As I said in pervious posts and at the Workshops... I wonder what the next 'doom and gloom' scary monster will be on the horizon. Does anyone even remember the predictions of Alberta's housing market to crash because of rent controls... I don't think so. Nor do most people remember how KYOTO was going to kill our market in 2001 and 2004. Sad how many things are taken out of proportion putting panic into investors who don't look at the world and national economics.



Here's the link. I recommend you start with the Oil & Gas Discussion thread and start at the end and work backwards. Enjoy:






Sorry Don, this link didn't work.

I work in the industry and I just heard drilling will be cut to 34% of utilization which was the same as when the industry collapsed in the mid 80's. I was at your Quick Start in Edmonton and don't want to jump on the media ban wagon. In the same breath, if these utilization amounts are correct, there are going to be a ton of jobs lost and the industry will definitely be effected. Maybe the oilpatch is going to feel the hit much more than the real estate market?

Thanks

Mark

 

[DonCampbell]

The human cost is not going to be fun over the coming 12 months as it washes it`s way through the industry. Drilling was already going to be cut dramatically this year anyway.

Actually the gas industry came out the biggest winner in the royalty review. Might temper the slow-down

New link for the royalty discussion (if this doesn`t work use the Quick link in the top left corner of this page and type in royalty it will bring up the same findings:

Royalty Discussions

 

[Thomas Beyer]

Drilling will be down, but overall the royalties are quite low compared to other nations, and oilsands taxes were not introduced. The high Can $ and teh low gas price has probably more impact on current investment decisions than the royalties introduced for 2009. Alberta will do well .. long term .. but expect hickups over the next 2 years .. until the BC Olympic construction jobs end .. and in-migration to Alberta will pick up in earnest .. buy if it cash-flows .. wait until you find a deal that makes sense .. much product on the market .. a time to be choosy .. so pick well and rent it well .. and it will be worth more in 3-4 years .. don`t expect a huge jump in prices over the next year or 2 as much product (new condos, old condos, new houses) is in the pipeline and will take time to be absorbed .. invest with cash-flow .. don`t speculate on equity upside (w/o cash-flow) ! Be more patient .. and you`ll be OK !!

 

[RedlineBrett]

QUOTE (thomasbeyer2000 @ Nov 5 2007, 08:59 PM) Drilling will be down, but overall the royalties are quite low compared to other nations, and oilsands taxes were not introduced. The high Can $ and teh low gas price has probably more impact on current investment decisions than the royalties introduced for 2009. Alberta will do well .. long term .. but expect hickups over the next 2 years .. until the BC Olympic construction jobs end .. and in-migration to Alberta will pick up in earnest .. buy if it cash-flows .. wait until you find a deal that makes sense .. much product on the market .. a time to be choosy .. so pick well and rent it well .. and it will be worth more in 3-4 years .. don`t expect a huge jump in prices over the next year or 2 as much product (new condos, old condos, new houses) is in the pipeline and will take time to be absorbed .. invest with cash-flow .. don`t speculate on equity upside (w/o cash-flow) ! Be more patient .. and you`ll be OK !!

Thanks for the post.. good advice there!