- Joined
- Aug 22, 2008
- Messages
- 428
-Energy producers are tentatively looking at boosting exploration in Alberta again after a government shift on royalties, but not by enough to rescue the province from a drilling slowdown in 2009, oil patch companies say.-there was also widespread confusion over just how much the new rates will mean because Alberta Energy published incorrect formulas with misleading royalties for new oil wells. “Alberta is poorly handling its biggest resource,” said Max Lof, CFO of junior Breaker Energy. “The changes marginally help producers,” Lof said.-energy company stocks nosedived yesterday as oil prices hit three-year lows.
-Meanwhile, long-time oil financier Rick Grafton has this message for Ed Stelmach: The Alberta premier can`t treat the province`s main economic engine as a subsidy to farmers.
-Grafton`s reaction was typical of the oil patch`s negative reviews yesterday of Alberta`s attempt to soften the blow of higher royalties starting in January: It`s too little, too late to reverse the activity drought, now that a collapse in energy prices, tight credit and equity markets, hot shale discoveries in competing jurisdictions with better fiscal terms have piled on to turn Alberta natural gas into a dead beat. "When you take too much, you all of a sudden take away the incentive to spend money," said Grafton, who heads Gibraltar Capital.
-AMJ Petroleum Consultants said the province is missing the mark. "If prices and costs are the primary drivers behind whether to drill or not to drill, then royalty savings become somewhat irrelevant if wells are not being drilled," said AMJ VP Ralph Glass. "A true stimulus must focus on making the economics of oil and gas exploration and production in Alberta more attractive."
-Ross MacDonald, VP of engineering at RMP Energy, one of the junior energy companies Stelmach is targeting with the onetime offer, said it`s not good enough for him to want to spend money.
-Andrew Potter, analyst at UBS Securities Canada, said "we believe that it will have a modest impact on the economics of new wells and is therefore unlikely to drive meaningfully higher spending levels."
(National Post, Globe and Mail 081121)
-Meanwhile, long-time oil financier Rick Grafton has this message for Ed Stelmach: The Alberta premier can`t treat the province`s main economic engine as a subsidy to farmers.
-Grafton`s reaction was typical of the oil patch`s negative reviews yesterday of Alberta`s attempt to soften the blow of higher royalties starting in January: It`s too little, too late to reverse the activity drought, now that a collapse in energy prices, tight credit and equity markets, hot shale discoveries in competing jurisdictions with better fiscal terms have piled on to turn Alberta natural gas into a dead beat. "When you take too much, you all of a sudden take away the incentive to spend money," said Grafton, who heads Gibraltar Capital.
-AMJ Petroleum Consultants said the province is missing the mark. "If prices and costs are the primary drivers behind whether to drill or not to drill, then royalty savings become somewhat irrelevant if wells are not being drilled," said AMJ VP Ralph Glass. "A true stimulus must focus on making the economics of oil and gas exploration and production in Alberta more attractive."
-Ross MacDonald, VP of engineering at RMP Energy, one of the junior energy companies Stelmach is targeting with the onetime offer, said it`s not good enough for him to want to spend money.
-Andrew Potter, analyst at UBS Securities Canada, said "we believe that it will have a modest impact on the economics of new wells and is therefore unlikely to drive meaningfully higher spending levels."
(National Post, Globe and Mail 081121)