Posted on: October 01, 2007 | about stocks: PWE
By Davy Bui
I received an email from a reader asking my opinion on the proposed Alberta oil production royalty hike (as well as cuts to royalties from some mature assets). I’ve posted my response below:
My opinion is that, long-term, this is noise. I try to avoid investments where returns hinge on an 8 percent tax hike.
Specifically as it relates to Penn West (PWE); they commented on this yesterday when they announced their monthly distribution. It will have no material affect on their current operations and may even help them as some of their current production may benefit from the royalty cuts for mature fields. However, they acknowledged that it may have a negative impact on their Peace River Oil Sands project. But the timeline on that is too far away and the moving targets in terms of the SIFT tax and now royalty hikes make any assessment on impact on revenues, cash flow, etc premature at this time. Keep in mind, Penn West has booked only a small fraction of the possible resource for that project. read more
Like this:
Like Loading...
This website and sisters
royaldutchshellplc.com,
shellnazihistory.com,
royaldutchshell.website,
johndonovan.website, and
shellnews.net,
are owned by
John Donovan. There is also a
Wikipedia segment.