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Gold/Mining/Energy : SU: Suncor Energy, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (28)	9/20/2007 3:58:20 PM
From: streetscraper	Respond to of 37

The people on FAST MONEY on CNBC seem to love this stock on the energy play. I just marked it to start checking it out. With oil to the moon who knows?

To: Dennis Roth who wrote (28)	10/26/2007 9:01:08 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 37

Suncor Energy Inc. (SU): Impact of Alberta royalty changes seems minimal; buy any dip - Goldman Sachs - 10/25/07 What's changed Alberta Premier Ed Stelmach released additional details on October 25 regarding the provincial government’s intended changes to its oil and gas royalty structure. Mr. Stelmach rejected the Review Panel’s call for an oil sands severance tax, instead choosing to implement a royalty structure explicitly tied to commodity price levels. The changes call for a sliding scale royalty payments of between 1% and 9% of gross revenues before a project recovers its capital and between 25% and 40% of net revenues post payout. The existing structure has a flat rate of 1% pre-payout and 25% post-payout. Our FY07/08/09 EPS is $4.76/$7.20/$7.90 (was $4.63/7.30/8.44). Implications Under our current commodity price assumptions – which we believe are meaningfully above Street consensus – the impact of the proposed changes appears minimal for Suncor (which is among the most exposed to the changes among companies we cover). We are modestly lowering our 12-month DCF-based target price by $3 to reflect the estimated present value impact of the new royalty structure. This compares to an estimated $10/share hit if the Review Panel’s recommendations were fully adopted. Valuation We see 26% upside to our revised $133 target price from $136, and continue to rate Suncor Buy relative to an Attractive coverage view. We would aggressively buy any dip related to this announcement. Key risks Key risks for Suncor shares include commodity price volatility, cost inflation, and government pronouncements. Impact on related securities We believe Suncor is the most exposed to the royalty changes among companies we cover. Other companies with significant oil sands leverage include Nexen, Canadian Natural Resources, Petro-Canada, and EnCana.