May 13, 2015
The prospect of a corporate tax rate hike and change in oil royalty rates by Alberta’s newly elected government has deepened uncertainty on the calculation of future oil revenues. In a Financial Post piece on the energy industry outlook, Torys’ Oil & Gas partner Derek Flaman commented on current investor sentiment. Below is an excerpt of the article.
Former premier Ed Stelmach changed royalty rates in 2009, based in part by the results of the 2007 Alberta Royalty Review panel. The prospect of another review means more uncertainty about future rates.
"The investment community hates uncertainty," says Derek Flaman of Torys LLP. "You need certainty to model these transactions. If you want to know what your IRR is going to be, your royalty rate is going to be a major factor in your calculation."
To read the full article, click here.