Quote:
Originally Posted by Ducay
You guys are clearly overestimating the impact this will have on the sector. An extra 1.5B is peanuts. Sure there may be a slowdown in smaller operations, but in the grand scheme of things, the economy will keep on trucking.
So with the labour market as it is, you guys are fearing layoffs?
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Well said. By having the announcement after market closes it also eliminates any emotional sell off. Savvy move by Ed.
My hunch is the market hardly skips a beat tomorrow morning. These companies now know where they stand for the long term and have a year to adjust. Who knows, maybe our dollar will fall a bit and it will be good for the whole country.
Like Ducay says, 1.5 billion is a drop in the bucket for these guys and more than worth it for access to these natural resources.
1.5 billion / year is cheap considering what we are encouraging these companies do to our environment, but I would be considered a lunatic in Alberta if I said that out loud. A barrel in the ground is going to be worth a hell of a lot more in the years to come. Hopefully they will figure out a better way to exploit the sands, seems like such a smash and grab job at the moment though. Destroying that land may seem pretty stupid in 100 years when a warmer planet makes Northern Alberta one of the most habitable places.
Something I found out about the sands yesterday is that only the center of the reservoir is good to develop at the moment. Apparently by 2020 the 12% grade will be done with only the 8% grade remaining. Does this info make a difference concerning royalties? My gut tells me it makes the royalties harder to swallow for the companies.