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Old 01-11-2016, 02:47 PM   #21
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Things are looking bleak right now, and I for one am worried about the results of the royalty review. I am guessing that they will implement something that doesn't make royalties worse at low prices (like current prices), but will grossly increase if prices ever recover, essentially destroying the upside potential.

My concern is that if a royalty scheme like that is implemented at month-end, companies who have been eating losses with the hope of earning that back if prices recover will have their plans dashed and we will see a rash of bankruptcies.
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Old 01-11-2016, 02:52 PM   #22
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Man, Ralph Klein was a champ.

http://www.cbc.ca/news/canada/calgar...-80s-1.3397053
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Old 01-11-2016, 03:09 PM   #23
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I'm not an NDP hater by any means, but we need to call a spade a spade. This sort of dilly-dallying with the royalty review is killing the industry:

http://calgaryherald.com/business/en...-delayed-again

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The results of Alberta’s royalty review are being delayed again.

Premier Rachel Notley now says they won’t come out until sometime in the next few weeks.
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Old 01-11-2016, 03:12 PM   #24
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Nice one! Shouldn't you be wearing tweed or something though?
He's shorter than I thought too.
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Old 01-11-2016, 03:14 PM   #25
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I'm not an NDP hater by any means, but we need to call a spade a spade. This sort of dilly-dallying with the royalty review is killing the industry:

http://calgaryherald.com/business/en...-delayed-again
WTI at $31/bbl is doing far more to killing the industry though.

But color me shocked that they are delayed again. Anyone want to start a poll for the O/U that the 2016 budget will be released on time?
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Old 01-11-2016, 03:15 PM   #26
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that's pretty weak. Maybe with the recent plunge they've had to go and re-work it more. What they set as the bottom wasn't bottom enough...
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Old 01-11-2016, 03:15 PM   #27
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This is getting ridiculous now

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Rachel Notley says panel report on oil royalties still weeks away

“It will be released to Albertans in the next very few weeks,” Notley told the show “The West Block

The panel’s report was to come out by the end of 2015, but Notley said in late December it would come out in early January.

On Sunday, Notley told Global TV the date would be later than that.
http://www.macleans.ca/news/rachel-n...ll-weeks-away/
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Old 01-11-2016, 03:20 PM   #28
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Can any oil sands producer turn a profit at $31?
The important number is effective bitumen prices, because that is the commodity actually being produced by most Oil Sands producers.

WCS is the headline price for that, but you must remember that about 30% of a WCS barrel is just recycled high value diluent (i.e. not production). It's the 70% of the barrel that represents true economic value added.

WCS is currently hovering around C$26/bbl at Edmonton and Condensate (i.e. diluent) around C$49/bbl. Do the math and that nets to $16/bbl bitumen. Back out the pipe costs from Fort McMurray and you're probably looking around $14-$15.

So on a variable cash cost basis its pretty skinny for even the best of producers. For new investment it is nowhere close.
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Old 01-11-2016, 03:23 PM   #29
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Originally Posted by _Q_ View Post
I'm not an NDP hater by any means, but we need to call a spade a spade. This sort of dilly-dallying with the royalty review is killing the industry:

http://calgaryherald.com/business/en...-delayed-again
With current oil prices being by far the rate limiting obstacle for market activity, does the review impact the market at all???
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Old 01-11-2016, 03:30 PM   #30
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With current oil prices being by far the rate limiting obstacle for market activity, does the review impact the market at all???
The hope is no. The fear is yes. We will have to wait and see what they do.
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Old 01-11-2016, 03:32 PM   #31
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With current oil prices being by far the rate limiting obstacle for market activity, does the review impact the market at all???
I'm guessing companies are delaying major layoff announcements until after the review so they can stick it on the NDP.
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Old 01-11-2016, 03:42 PM   #32
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To try to get a little positivity out of the situation, anyone else looking to buy oil ETF's like UCO? If you believe that oil will eventually bounce back, and considering where prices are not, it might not be a bad thing to throw a little money at.

Im not a hardcore investor by any means, and I do think world is slowly moving away from oil for the long-term, but it just seems silly to think it won’t go up again at some point, even if not to previous levels. I will always remember in 2008, living in the middle of the American stock market/economic meltdown, everyone was freaking out, and it feeling like the end of the world. In retrospect it was an amazing buying opportunity for those who could wait it out. Perhaps it is here too.
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Old 01-11-2016, 03:58 PM   #33
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At very least the dollar is saving us right now.

I'd sure hate to be a high cost US producer (i.e. the shale guys). I suppose the precipitous drop in oil prices isn't all bad. This just expedites their demise while we at least stay somewhat buffered.
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Old 01-11-2016, 04:00 PM   #34
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To try to get a little positivity out of the situation, anyone else looking to buy oil ETF's like UCO? If you believe that oil will eventually bounce back, and considering where prices are not, it might not be a bad thing to throw a little money at.

Im not a hardcore investor by any means, and I do think world is slowly moving away from oil for the long-term, but it just seems silly to think it won’t go up again at some point, even if not to previous levels. I will always remember in 2008, living in the middle of the American stock market/economic meltdown, everyone was freaking out, and it feeling like the end of the world. In retrospect it was an amazing buying opportunity for those who could wait it out. Perhaps it is here too.
That's why any COS shareholders who rejected the Suncor offer are dumb. So you want 98% correlation to oil, hey. Well then just take the free 40% premium Suncor is offering and go buy some oil ETFs with it.
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Old 01-11-2016, 04:04 PM   #35
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I'm guessing companies are delaying major layoff announcements until after the review so they can stick it on the NDP.
Yeah...I'm sure sticking it to the NDP is a high priority for companies in survival mode.
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Old 01-11-2016, 04:21 PM   #36
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Yeah...I'm sure sticking it to the NDP is a high priority for companies in survival mode.
I was thinking of the majors who aren't in survival mode. But if the review is still weeks away, I don't think even they will wait.
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Old 01-11-2016, 04:22 PM   #37
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so does it make sense for me to buy oil by the barrel and store them in self storage units?

On the NDP front, its not really unexpected, this government is pretty clueless and out of touch, they know if they release this royalty report when things are like this they're going to get pummeled. they're waiting for the Superbowl and they'll drop the report during game time.

I also doubt that the 2016 budget will be released with a lot of fan fare.
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Old 01-11-2016, 04:31 PM   #38
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It is not necessary to have a budget anymore, just spend and give us the tally and the deficits at the end will be fine.
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Old 01-11-2016, 04:41 PM   #39
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so does it make sense for me to buy oil by the barrel and store them in self storage units?

On the NDP front, its not really unexpected, this government is pretty clueless and out of touch, they know if they release this royalty report when things are like this they're going to get pummeled. they're waiting for the Superbowl and they'll drop the report during game time.

I also doubt that the 2016 budget will be released with a lot of fan fare.
Gotta wonder how all those guys that tankers full of it at $60 are thinking right about now...
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Old 01-11-2016, 04:41 PM   #40
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so does it make sense for me to buy oil by the barrel and store them in self storage units?

On the NDP front, its not really unexpected, this government is pretty clueless and out of touch, they know if they release this royalty report when things are like this they're going to get pummeled. they're waiting for the Superbowl and they'll drop the report during game time.

I also doubt that the 2016 budget will be released with a lot of fan fare.
Except for the parties across the aisle. Some of them can't wait to see the budget because its going to be grim and they can attempt to profit politically off peoples misery.
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