longoil

Investors Jostle over the Oil Sands Prize

In regards to HTE, there is several scenarios that can play out.

1) Approval of shareholders and Canadian government, HTE share price will not go above $10.

2) Non-Approval of either current shareholders or Canadian government, HTE share price will tank to $3 or $4 as KNOC is forced to unload its holdings.

3) Another Asian oil company enters the competition and bids HTE to $15 or $20.

I would say that scenario #1 is the most likely at 60%, scenario #2 is possible at 30% and scenario #2 is the least likley at 10%.

Investors Jostle over the Oil Sands Prize

Jimbo,

I agree 100% with you. There many sides to the oil sands developments.

1) They provide secure oil to the USA from neighbors who don't use the proceeds to fund terrorism against the USA and its allies.

2) There are many environmental concerns with the oil sands no doubt. But companies like Syncrude and Suncor have made great strides. The have increased the recycling rate of water used to the point where only 3 barrels or water are needed (instead of the previous 10 barrels) to produce 1 barrel of oil

3) Suncor has developed technology where the reclamation rate of mined oil sands land has decreased from decades to weeks.

www.montrealgazette.co...

4) Oil sands provides countless well paying jobs to people from Eastern Canada that have a experienced high unemployment rate.

Investors Jostle over the Oil Sands Prize

KNOC has stated they will try acquire another oil sands property in teh near future but obviously would not state which one.

Judging the stock price jumps today of PWE and BTE (9% and 0.65% respectively), many investors seem to be betting that PWE will be the next target.

High-Yield Canadian Royalty Trusts: What's the Catch?

The 2010 Canadian Income Trust legislation is not cast in stone.
The current minority Conservative has lost much of its popularity and has been embroiled in a few scandals recently. The Liberal party will most likely capitalize on the dissent around income trusts and implement a more equitable income trust structure (or even the old structure).

The only changes the income trust structure in Canada really needed was to prevent companies like Bell Canada and Telus which have no legititmate reason to be income trusts, other than to use the favorable tax treatment to make up for their incompetent management.

Five Oil and Gas Trust Picks

Brian,

The negative effect of the future tax rate was factored into income trusts immediately after the announcement of the new tax rate for income trusts on Oct 31, 2006. ERF lost $20 instantly from a peak in the mid-$60's in July 2006 (with crude oil in the mid-$60) and has never risen above $50 (in spite of $135 oil).

I am on a personal mission to make sure the Canadian conservative party pays for this Halloween surprise. I make it a point to tell all the seniors citizens I meet how their retirement funds have suffered significantly under Tory rule. Seniors are the most likely group to own income trusts and have a superb attendence record at the voting booth.

The problem at the time was the conservative party was trying to prevent badly run companies (like Bell Canada and Telus) from converting to income trusts to minimize their tax liability. They unfortunately decide to punish all existing income trusts in one swoop(including energy companies in Alberta that have created a plethora of high paying jobs for not only Alberta citizens, but for countless citizens of many economically depressed regions in Canada).


On Jun 06 11:58 AM Brian27 wrote:

> Six months ago the trusts were a bargain. The Canadian government
> wants to reduce the corporate tax rate so the impact of trust convervison
> to corporation will be mitigated a bit.
>
> But one has to value the trusts using the future corporate tax rate
> prevalent in 2011. Certainly, net income, cash flow and dividends
> will be lowered significantly. One should expect that alot of trusts
> will be bought out as 2011 approaches and the tax pools are used
> up, as the reason for their existence (tax shelter) will be gone.

Five Oil and Gas Trust Picks

There is essentially three classes of accounts that will be affected by the new tax regime.

1) Foreign investors will definitely suffer under the post income trust structure.
2) Canadian investors with RRSP accounts (American equivalent of IRA or ROTH accounts) will suffer as well.
3) Canadian investors with non-RRSP accounts (taxable investment accounts) will be relatively unaffected since they will be able to claim dividend tax credits for their trusts that have converted to corporate structures.

Many trusts will also be able to delay the affect of new 2010 legisilation on investors by taking advantage of large tax pools they have accumulated over the years.


On Jun 06 06:28 AM fxtrader07 wrote:

> don't expect the canadian govt to retreat on the new taxation regime.
> and even in the unlikely even that it will - it will only changes
> rules with effect to canadian investors.
> interestingly, the changed taxation hurts foreign investors much
> more than canadians, and to some extent, it is an understandable
> move by the govt. (though surely not a job well done) there is zero
> reason why a foreign holder of a canroy should be treated better
> than a canadian.
> that said, there have been many trustworthy experts who argue that
> the trusts will have to convert into normal corporations and that
> such move will lead to significant lower valuations.
> is that adressed in the aforesaid report?