Quote:
Originally Posted by Frequitude
I suppose there's two types of capital I'm thinking of. One is actual cash capex spent by companies (my world). The other is shareholder capital that invest in corporate equity (your world...might have described that incorrectly).
On first one, you are right. Not a lot of it today has to do with royalty uncertainty. The price of oil does. I would suggest that impact was higher back at $75 when more stuff was slightly economic.
Its the second one that I'm referring to. Shareholder capital waiting on the sidelines to figure out how to value Alberta oil and gas companies. It's a bit of a turn-of-phrase, but I am suggesting that there is a lot of shareholder capital sitting on the sidelines right now wanting to get back in to the oil & gas space but waiting for the new framework first. Again, that's way more your world than mine so I'm open to be educated on that.
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No, I wasn't really thinking of shareholders here because most people in Calgary at this point are too scared to invest in oil and gas. If they're still gainfully employed they have no idea how long that will last...could be gone any day, or at least that is the general feeling. So rather than invest in the same industry they would rather not. That could be construed as a royalty issue, but I think its the general market sentiment at this point.
The capex is clearly the bigger deal for the province. That is what keeps the economy flowing and creates jobs not only in oil and gas but other sectors. I just think that while the royalty framework is a concern, its kind of an "also ran" on the list of issues faced by the corporations here.