Globe says Crescent Point pans proposed Alberta royalty
2007-10-03 05:54 ET - In the News
The Globe and Mail reports in its Wednesday edition that Crescent Point Energy Trust says it will not spend money in Alberta next year, based on "uncertainty" around potential higher royalties. The Globe's David Ebner writes that Crescent Point says it will spend its entire $150-million capital budget for 2008 in Saskatchewan. It is already focused on that province and is spending most of this year's $150-million budget there, with about $30-million going to Alberta. The trust is the second company to issue a press release saying it will move money away from Alberta if recommendations to raise royalties are adopted. EnCana said Friday it would cut $1-billion from planned 2008 spending of $3-billion if full recommendations to increase royalties are adopted. While industry is slowly accepting the fairness of higher rates in the oil sands, anger remains palpable on what is called the conventional side of the business, traditional oil and gas wells that form the cornerstone of Alberta's economy. Crescent Point chief Scott Saxberg says the reasons given for boosting the royalty do not make sense. He says Crescent Point has $100-million of opportunities in Alberta that it is not pursuing right now.
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Crescent Point to axe Alberta from development budget
2007-10-02 14:50 ET - News Release
Mr. Scott Saxberg reports
CRESCENT POINT ENERGY TRUST TO DIRECT ALL OF ITS $150 MILLION 2008 CAPITAL PROGRAM TO SASKATCHEWAN DUE TO THE ALBERTA ROYALTY REVIEW UNCERTAINTY
Crescent Point Energy Trust has completed an evaluation of the recommendations contained in the Alberta royalty review panel report. The trust has concluded that the report's analysis is flawed and that its recommendations will negatively impact future oil and gas investment in the province of Alberta.
"Because of the uncertainty created by the report, Crescent Point has decided to direct all of its $150-million 2008 preliminary capital development budget to the province of Saskatchewan," says Scott Saxberg, president and chief executive officer of Crescent Point. "Increased royalty rates in Alberta would decrease the rates of return on projects in the province, making investments in other jurisdictions more attractive."
With more than 1,000 low-risk development drilling locations in Saskatchewan, Crescent Point is well positioned to execute its business plan of creating sustainable value-added growth in reserves, production and cash flow on a per unit basis. According to Mr. Saxberg, the trust welcomes Premier Stelmach's decision to consult with industry before making decisions on the report's recommendations.
"We believe that the report does not consider all of the factors, including costs and risk, that make up the full-cycle economics of drilling for conventional oil and natural gas in the maturing Western Canadian sedimentary basin. The recommendations of the report, if implemented as proposed, would make the full-cycle economics of exploring and developing conventional oil and natural gas in Alberta unattractive in many cases," he says.
Crescent Point believes that implementing the report's recommendations would have significant negative implications for the oil and gas industry and for economic growth in the province of Alberta. The trust is actively working with the Canadian Association of Petroleum Producers to provide feedback to the province on this important issue. |
