Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
holdings update:
CONNACHER OIL AND 4.75%30JUN12 (CLL.DB.A) Debenture (Convertible unsecured bond)
ARMTEC INFRASTRUCTURE INC FD T (ARF.UN) Infrastructure - Construction Trust
GENIVAR INC FD TR UNITS (GNV.UN) Infrastructure - Construction Trust
ATLANTIC POWER CORP INC PARTIC (ATP.UN) Infrastructure - Power Gen IDS-2011 Proof
CML HEALTHCARE INC FD TR UNITS (CLC.UN) Laboratory Trust Mostly Ontario so government backed
MEDICAL FACILITIES CORP INC PA (DR.UN) Laboratory/Clinic Trust
ECU SILVER MINING (ECU) Silver Lotto ticket
EVOLVING GOLD CORP (EVG) Gold Lotto Ticket
PHARMAGAP (GAP) Drug Lotto ticket News coming.
HOME EQTY INC TR UNITS (HEQ.UN) Trust converting to schedule 1 Bank.structure Reverse mortgages.
DDJ HIGH YIELD FD (HYB.UN) Junk Bonds
ITHACA ENERGY (IAE) North Sea junior News pending
K-BRO LINEN INC FD TR UTS (KBL.UN) Trust Linen supply.
KILLAM PROPERTIES (KMP) High yield common stock housing
MORNEAU SOBECO INC FD UNITS (MSI.UN) Trust Pension/Human resources consultants
NEW FLYER INDS & NEW FLYER IND (NFI.UN) Bus manufacturer IDS 2011-proof (Infrastructure)
NORTHSTAR HEALTHCARE (NHC) High yield experimewnt gone horribly wrong ... Divi suspended. Share price collapsed. Built for bagholders ;O)
NORTHLAND POWER INC FD TR UTS (NPI.UN) Power Some green Trust. (infrastructure)
NORTHERN PROPERTY REAL EST INV (NPR.UN) REIT no 2011 isues. Partially government backed.
PEMBINA PIPELINE INC FD TR UNI (PIF.UN) Pipeline trust. Growth .. recently bought gas collection facilities.
STETSON OIL AND GAS LTD (SSN) Bakken play lotto ticket
STUDENT TRANSN AMER LTD (STB) Bussing company IDS 2011-proof.
SOUTHERN CO (SO) US {Power utility.. Presently had nuke problems. Bad idea for a Canuck in declining USD scenario.
PROSHARES ULTRASHORT LEHMAN 20 (TBT) May be sold soon in favour of Canidian ETF with no currency issues..
FORTIS INC Canadian utilily gas/power gen with soe real estate and hotel exposure.
SENTRY SEL DVSF ICM FD TU Diversified Trust.
TRANSCANADA CORP Pipeline with growth potential
holdings.. posting back on my old home again..
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=37062133
Exchanged my REF.UN for more NPR.UN
Added more HGU.
My biggest theme is still CASH, then YIELD... if reflation works.. it'll still be a while before commodities run again.. at least now I know a lot of the better names... senior and junior :O) I think there are lot of deflationary forces out there.. Inflation trade seems a bit crowded to me.. but I am always willing to change ... FAST.
Broken down on the long side:
Clean/Alt Energy:
* BORALEX POWER INC FD TR UNITS (BPT.UN) Biomass / run of river.
* NORTHLAND POWER INC FD TR UTS (NPI.UN) (not 100% but has wind)
5N PLUS INC (VNP) Solar materials supply.
SUNTECH PWR HLDGS CO ADR (STP) Solar.
ZENN MOTOR CO (ZNN) Electric Cars. Possibly EeStore ultracapacitor deal.
JA SOLAR HLDGS CO SPONSORED AD (JASO) Solar.
CLAYMORE EXCHANGE-TRADED FD TR (TAN) Solar ETF.
Healthcare:
* MEDICAL FACILITIES CORP INC PA (DR.UN) Specialty hospitals and day surgery.
* NORTHSTAR HEALTHCARE (NHC) Small healthcare centres Texas. Suspended divi. LONGSHOT lottery ticket..
* CML HEALTHCARE INC FD T/U (CLC.UN) Canadian Labs
ALLSCRIPTS MISYS HEALTHCARE SO (MDRX) Healthcare software
Infrastructure (a broad topic)
* AECON GROUP (ARE) Construction.. May have too much oilsands exposure now.
* ARMTEC INFRASTRUCTURE INC FD T (ARF.UN) Sewers, concrete etc..
* GENIVAR INC FD TR UNITS (GNV.UN) Construction.
* STUDENT TRANSN AMER LTD (STB) Bussing.
GENERAL CABLE CORP-DEL NEW (BGC)
* NEW FLYER INDS & NEW FLYER IND (NFI.UN) Bud builder.
* BOMBARDIER INC-CL A MULTIPLE V (BBD.A) Mass transit.
STANTEC (STN) Construction.
Financials (Canadian):
* AGF MANAGEMENT CL B NON-VTG (AGF.B)Mutiual fund company YIKES!!
* BANK OF MTL (BMO)
* KINGSWAY FINANCIAL SERVICES (KFS)
* NATIONAL BK OF CDA (NA)
REITS and similar:
* NORTHERN PROPERTY REAL EST INV (NPR.UN (Canadian government and large corporations biggest clients)
* CDN REAL EST INVESTMENT TR UNI (REF.UN) very conservative REIT
* KILLAM PROPERTIES (KMP) upscale trailer park boys :O)
MISC:
* HOME EQTY INC TR UNITS (HEQ.UN) Reverse mortgages
* DDJ HIGH YIELD FD (HYB.UN) Junk Bonds.
* KINGSWAY FINANCIAL SERVICES (KFS) Insurer / reinsurer.
* MORNEAU SOBECO INC FD UNITS (MSI.UN) Pension consultants
* PEMBINA PIPELINE INC FD TR UNI (PIF.UN) Pipeline
* SPROTT (SII) play on commodities mostly
* K-BRO LINEN INC FD TR UTS (KBL.UN) Linen supply.
PROSHARES ULTRASHORT LEHMAN 20 (TBT) 2X short 20year US treasuries
PROSHARES ULTRASHORT REAL EST (SRS) 2x short US realstate.
Retail:
* PARKLAND INC FD TR UNIT (PKI.UN) Gas stations / Convenience Stores
* SENTRY SELECT DIVERS INC TR UN (SDT.UN) Diversified trust..
COLLECTIVE BRANDS (PSS) Cheap shoes... great earnings.. again.. folks need shoes to look for work and food :O)
PMs:
HGU 2x long Toronto gold.
K...I'm in the middle of something...I'll chat with you tomorrow--take a read of Mostly:Classical and I'm sure you'll have a good laugh of some of the things I've posted.
take care.
LOL I thought that green mailbox flag was my me talking to myself ;o)
hey K... lonely...?
you're welcome to pay me a visit...
Wow... what a lonely place this has become.. :o(
Sold my MSD today for 9.81 :O) looking to re-enter 8ish.. depends...
Have been accumulating more TAN, TBT and SRS.. last two are good performers lately..
Bought PKI.UN recently.. about 7.00 avg.. started position in KBL.UN.. and I'm long gold via ETFs... that's right.. long not short :O)
Bought ZNN.V Electric Cars
FWIW... Added:
* BMO.TO: sub new issue price.
* NA.TO: 25-30... ABCP now backed by Government.. Market waiting to see if they issue more paper to raise their Tier 1 Capital ratio.
TBT: very small position... double short US treasuries 20year.. in and out and in for a loss.. maybe too early.. thinking long treasuries short oil trade getting stale.. ONLY for short term / swing trades this one.
TAN: Solar ETF... small position... lots of bids in lower... will watch action... looking to accumulate this one..
* MSD.TO: has intellectual property licenses .. good yield.
STN.TO: Infrastructure play.
* ARF.UN: got lucky and added more before the pop..
* HYB.UN.TO: High Yield bond fund.. Added a few more lower..
Mostly stink bids (quite stinky) on LT plays..
Again '*' denotes YIELD
Playing HED HXD HFD HGD as hedges... quantity and holding times very fluid.
Well folks..I'm off out west Sunday... in between Toronto Storms :o) so I just want to wish everyone a great holiday in case I have no net access out there..
B
every thing on sale like boxing day specials.
Yup everything going great been out drilling and leaving again tomorrow
Time to Buy Fertz
Please scroll down for both charts. Second is just a nice little example. Hope you are well RR.
...
My biggest theme is still CASH, then YIELD... if reflation works.. it'll still be a while before commodities run again.. at least now I know a lot of the better names... senior and junior :O)
Broken down on the long side:
Clean/Alt Energy:
* BORALEX POWER INC FD TR UNITS (BPT.UN)
* NORTHLAND POWER INC FD TR UTS (NPI.UN) (not 100% but has wind)
5N PLUS INC (VNP)
SUNTECH PWR HLDGS CO ADR (STP)
Healthcare:
* MEDICAL FACILITIES CORP INC PA (DR.UN)
* NORTHSTAR HEALTHCARE (NHC)
* CML HEALTHCARE INC FD T/U (CLC.UN)
Infrastructure (a broad topic)
* AECON GROUP (ARE)
* ARMTEC INFRASTRUCTURE INC FD T (ARF.UN)
* GENIVAR INC FD TR UNITS (GNV.UN)
* STUDENT TRANSN AMER LTD (STB)
GENERAL CABLE CORP-DEL NEW (BGC)
* NEW FLYER INDS & NEW FLYER IND (NFI.UN)
Energy:
* NEWALTA INC FD TR UNIT (NAL.UN) Converts to corporation Jan 1, Yield plummets to 8% also an outside the box 'green play'
* VANGUARD NATURAL RES LLC (VNR) a US MLP almost 2 years of hedges to protect distribution.. Priced as if NG cannot rebound in that time frame... wish I delayed the buy though..
REITS and similar:
* NORTHERN PROPERTY REAL EST INV (NPR.UN (Canadian government and large corporations biggest clients)
* CDN REAL EST INVESTMENT TR UNI (REF.UN) very conservative REIT
* KILLAM PROPERTIES (KMP) upscale trailer park boys :O)
MISC:
* HOME EQTY INC TR UNITS (HEQ.UN) Reverse mortgages
* DDJ HIGH YIELD FD (HYB.UN) Junk Bonds.
* KINGSWAY FINANCIAL SERVICES (KFS) Insurer / reinsurer.
* MORNEAU SOBECO INC FD UNITS (MSI.UN) Pension consultants
* PEMBINA PIPELINE INC FD TR UNI (PIF.UN) Pipeline
* SPROTT (SII) play on commodities mostly
* ING GROEP N V PREF CTF 7.3750% (IDG) Preferred shares of ING Bank
COLLECTIVE BRANDS (PSS) Cheap shoes... great earnings.. again.. folks need shoes to look for work and food :O)
* SENTRY SELECT DIVERS INC TR UN (SDT.UN) Diversified trust..
Hedges:
HORIZONS BETAPRO S&P/TSX CAPPE (HED)
HORIZONS BETA PRO S&P/TSX 60 B (HXD)
HORIZONS BETAPRO S&P/TSX GLOBA (HGD)
HORIZONS BETAPRO S&P/TSX GLOBA (HFD)
All hedges have tight stops here.. oil due for bounce.. financials ? Rebound overdone methinks.. MFC for example as other big lifecos will suck until market rebounds... Banks.. solid but rev's dropping until market rebounds.. most money from jacking up our fees :o(
Gold ? Never dropped enough...
Re: FWIW What I own now:
I'll play too...
* Penn West Energy (PWT.un)
* Enerplus Resources (ERF.un)
* Pengrowth Energy (PGF.un)
* Freehold Royalty (FRU.un)
* Harvest Energy (HTE.un)
* Amalgamated Income (AI.un)
Aqua Pure Ventures (v.AQE)
Aurcana Corporation (v.AUN)
Baja Mining (v.BAJ)
Big Sky Energy (BSKO)
Golden Predator Mines (v.GP)
Petra Petroleum (v.PTL)
Prime Meridian Resources (v.PMR)
Q-Gold Resources (v.QAU)
TG World Energy (v.TGE)
Cash set aside for the TFSA (constantly changing strategy for this), declining lines of credit. All the trusts are in cash account and it looks like this cashflow will be taking a haircut.
FWIW What I own now:
* AECON GROUP (ARE)
* ARMTEC INFRASTRUCTURE INC FD T (ARF.UN)
* BORALEX POWER INC FD TR UNITS (BPT.UN)
* MEDICAL FACILITIES CORP INC PA (DR.UN)
* GENIVAR INC FD TR UNITS (GNV.UN)
* HOME EQTY INC TR UNITS (HEQ.UN)
* DDJ HIGH YIELD FD (HYB.UN)
* KINGSWAY FINANCIAL SERVICES (KFS)
* KILLAM PROPERTIES (KMP)
* MORNEAU SOBECO INC FD UNITS (MSI.UN)
* NEWALTA INC FD TR UNIT (NAL.UN) Converts to corporation Jan 1, Yield plummets to 8%
* NEW FLYER INDS & NEW FLYER IND (NFI.UN)
* NORTHSTAR HEALTHCARE (NHC)
* NORTHLAND POWER INC FD TR UTS (NPI.UN)
* NORTHERN PROPERTY REAL EST INV (NPR.UN)
* PEMBINA PIPELINE INC FD TR UNI (PIF.UN)
* CDN REAL EST INVESTMENT TR UNI (REF.UN)
* SPROTT (SII)
* STUDENT TRANSN AMER LTD (STB)
GENERAL CABLE CORP-DEL NEW (BGC)
* ING GROEP N V PREF CTF 7.3750% (IDG)
COLLECTIVE BRANDS (PSS)
SUNTECH PWR HLDGS CO ADR (STP)
* VANGUARD NATURAL RES LLC (VNR)
* SENTRY SELECT DIVERS INC TR UN (SDT.UN)
* CML HEALTHCARE INC FD T/U (CLC.UN)
5N PLUS INC (VNP)
I added these late Friday on stink bids.. I left the house and the market was up about 200pts only LOL..
HORIZONS BETAPRO S&P/TSX CAPPE (HED)
HORIZONS BETA PRO S&P/TSX 60 B (HXD)
HORIZONS BETAPRO S&P/TSX GLOBA (HGD) (started earlier in the week)
Those with '*' have yield...
60% cash ... tight stops on the shorts.. which is where most of the cash change went...
Hows the bargin hunting going POT now 71.59 AGU 23.40
All fert driven by HYPE the world is running out of food now the tunes have flipped over to the dark side
Global economic crunch ends oilsands boom
Gary Lamphier
The Edmonton Journal
Tuesday, November 18, 2008
EDMONTON -- Welcome to the oilsands moratorium.
No one will call it that, of course. Not officially, anyway. There's been no government edict, and no sweeping regulatory ruling requiring a slowdown in the pace of new projects around Fort McMurray.
Still, it's a moratorium just the same. Yesterday's oilsands boom is gone. It's not a bust, but the post-boom era has clearly arrived. Monday's announcement by Petro-Canada and its partners that they'll delay a final decision on whether to proceed with the proposed $24-billion Fort Hills oilsands megaproject pretty much seals the deal.
Whether the pause lasts 12 months, two years or five years, no one knows. Somewhere, Maude Barlow must be celebrating.
Although former Alberta premier Peter Lougheed has lobbied long and hard for such a slowdown -- his campaign was the subject of a recent cover story in one national business magazine -- he can't take credit for this, either.
With oil prices at $55 US -- $92 below July's peak price of $147 -- and financial markets in turmoil as a global recession hits, producers are heading to the exits en masse, putting their expansion plans on hold.
In just a few weeks, the markets have accomplished what Lougheed, the Pembina Institute, and others have demanded for years. Just as the bull market triggered a boom, the bear market has taken it all away.
Let me be clear. I believe this is a good thing, despite the short-term pain that will be inflicted on some as projects are deferred. So do many oil-and-gas industry execs.
As I've said repeatedly, the frenetic pace of expansion in the oilsands over the past five years caused a lot of harm.
Project costs skyrocketed, infrastructure pressures soared, labour shortages were rampant, worker health/safety issues mushroomed, housing costs went through the roof, and overpaid twentysomethings spent like drunken sailors.
Many thought the boom would never end. But booms always end. That's why they're called booms.
Employers outside the oilpatch had to pay big bucks to attract workers, even though they didn't generate the same fat profits as energy firms.
High school kids dropped out of school to earn big bucks in the 'patch. Real estate speculators flipped condos like hamburgers.
None of this was sustainable, or healthy. Melcor CEO Ralph Young has seen many real estate cycles come and go, and this one had all the earmarks of a classic bubble, he says.
"Looking back, 2006 and especially 2007 were years where very, very foolish decisions were being made. We saw it in the real estate market, and we probably got caught up in it as well," he says.
"Prices -- particularly in the residential markets, for raw land and housing, were just rising at too rapid a rate. There was rampant speculation. It became cocktail circuit talk, how much your house price was rising, and how people were (flipping) condos. That was a pretty clear sign that we'd hit an unsustainable level."
Environmental concerns also mounted. The Stelmach government's $2-billion plan to develop an integrated carbon capture and storage network -- while laudable -- came late in the game, and has been largely ignored outside Alberta.
That's just one reason why the noisy "green" lobby has been so successful in demonizing the oilsands, which generate less than 10 per cent of Canada's carbon emissions, and a fraction of one per cent of global emissions.
Petro-Canada's announcement doesn't come as a surprise, mind you. The Calgary-based integrated oil company and its partners at Fort Hills -- mining giant Teck Cominco, of Vancouver, and UTS Energy, of Calgary -- signalled their growing concerns well in advance.
A few weeks ago, the partners indicated a decision on the upgrader portion of the project might have to wait indefinitely, while they pondered whether to proceed with the mine alone, which accounts for more than half the total cost of the project.
The partners previously revealed that cost estimates for the project had ballooned by more than 50 per cent, from $14 billion to roughly $24 billion.
With oil prices down to $55, and most analysts saying Fort Hills requires $90 oil to be viable, the writing was on the wall. Petro-Canada now joins a growing list of key oilsands producers that have announced project delays in recent weeks, including Suncor, Canadian Natural Resources, and Royal Dutch Shell.
The good news? Project costs are already falling rapidly, as costs for steel and other materials sink, and demand for labour eases.
Like other players, Petro-Canada says it will go back to the drawing board and re-examine every aspect of its costs with a fine-tooth comb, before any thumbs-up or thumbs-down decision on Fort Hills is made.
Ironically, the oilsands giants only have themselves to blame for pushing project costs to sky-high levels. With so many producers trying to squeeze through the same narrow entry door at once, the result was entirely predictable.
The wild speculation that drove oil prices to $147 only made the situation worse.
Now, the pendulum has swung the other way. Sanity is slowly returning, and the seeds of the next up cycle in the oilsands are being sown.
The world has never seen such freezing heat
By Christopher Booker
Last Updated: 12:01am GMT 16/11/2008
A surreal scientific blunder last week raised a huge question mark about the temperature records that underpin the worldwide alarm over global warming. On Monday, Nasa's Goddard Institute for Space Studies (GISS), which is run by Al Gore's chief scientific ally, Dr James Hansen, and is one of four bodies responsible for monitoring global temperatures, announced that last month was the hottest October on record.
This was startling. Across the world there were reports of unseasonal snow and plummeting temperatures last month, from the American Great Plains to China, and from the Alps to New Zealand. China's official news agency reported that Tibet had suffered its "worst snowstorm ever". In the US, the National Oceanic and Atmospheric Administration registered 63 local snowfall records and 115 lowest-ever temperatures for the month, and ranked it as only the 70th-warmest October in 114 years.
So what explained the anomaly? GISS's computerised temperature maps seemed to show readings across a large part of Russia had been up to 10 degrees higher than normal. But when expert readers of the two leading warming-sceptic blogs, Watts Up With That and Climate Audit, began detailed analysis of the GISS data they made an astonishing discovery. The reason for the freak figures was that scores of temperature records from Russia and elsewhere were not based on October readings at all. Figures from the previous month had simply been carried over and repeated two months running.
The error was so glaring that when it was reported on the two blogs - run by the US meteorologist Anthony Watts and Steve McIntyre, the Canadian computer analyst who won fame for his expert debunking of the notorious "hockey stick" graph - GISS began hastily revising its figures. This only made the confusion worse because, to compensate for the lowered temperatures in Russia, GISS claimed to have discovered a new "hotspot" in the Arctic - in a month when satellite images were showing Arctic sea-ice recovering so fast from its summer melt that three weeks ago it was 30 per cent more extensive than at the same time last year.
A GISS spokesman lamely explained that the reason for the error in the Russian figures was that they were obtained from another body, and that GISS did not have resources to exercise proper quality control over the data it was supplied with. This is an astonishing admission: the figures published by Dr Hansen's institute are not only one of the four data sets that the UN's Intergovernmental Panel on Climate Change (IPCC) relies on to promote its case for global warming, but they are the most widely quoted, since they consistently show higher temperatures than the others.
If there is one scientist more responsible than any other for the alarm over global warming it is Dr Hansen, who set the whole scare in train back in 1988 with his testimony to a US Senate committee chaired by Al Gore. Again and again, Dr Hansen has been to the fore in making extreme claims over the dangers of climate change. (He was recently in the news here for supporting the Greenpeace activists acquitted of criminally damaging a coal-fired power station in Kent, on the grounds that the harm done to the planet by a new power station would far outweigh any damage they had done themselves.)
Yet last week's latest episode is far from the first time Dr Hansen's methodology has been called in question. In 2007 he was forced by Mr Watts and Mr McIntyre to revise his published figures for US surface temperatures, to show that the hottest decade of the 20th century was not the 1990s, as he had claimed, but the 1930s.
Another of his close allies is Dr Rajendra Pachauri, chairman of the IPCC, who recently startled a university audience in Australia by claiming that global temperatures have recently been rising "very much faster" than ever, in front of a graph showing them rising sharply in the past decade. In fact, as many of his audience were aware, they have not been rising in recent years and since 2007 have dropped.
Dr Pachauri, a former railway engineer with no qualifications in climate science, may believe what Dr Hansen tells him. But whether, on the basis of such evidence, it is wise for the world's governments to embark on some of the most costly economic measures ever proposed, to remedy a problem which may actually not exist, is a question which should give us all pause for thought.
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/11/16/do1610.xml
Oilsands CEO stays cheerful
Backlog of projects keeps business on top
Gary Lamphier
The Edmonton Journal
Saturday, November 15, 2008
Last time I sat down with Rod Ruston, CEO of North American Energy Partners, the big oilsands construction firm was flying high.
It had just completed its IPO (initial public offering) on the Toronto and New York stock exchanges, and its shares were trading in the $20 range, giving it a market value of nearly $700 million.
That was in late 2006, 18 months after Ruston -- a career mining exec with decades of front-line experience in Australia, South Africa and Madagascar -- was recruited to run the Spruce Grove-based company.
When I dropped by for a chat this week, it was a far different story. Despite strong revenue and earnings growth over the past couple of years, NAEP's share price has been absolutely crushed. The stock closed Friday at just $3.70 on the Toronto Stock Exchange, close to its recent record low of $3.05. That's more than $20 or 85 per cent below the high of $24-plus, set in July. NAEP's market cap is now just $130 million.
That's not a haircut -- investor slang for a stock that's been clipped in price -- it's more like a beheading. So what happened?
Three things. First, a huge drop in oil prices, which are down $90 US a barrel or 61 per cent since July, closing Friday at $57.04 in New York.
Second, a stock market collapse, with Toronto's main equity index roughly 6,100 points or 40 per cent below its June peak. And third, a series of recently announced project delays in the oilsands, by companies like Suncor and Nexen.
So what's the impact of all this negative news on NAEP's fundamental business outlook? A lot less severe than you might think, says Ruston.
With a work backlog of $900 million, a healthy balance sheet, and lots of oilsands work in the pipeline -- much of it tied to operating oilsands mines, not just proposed future projects -- Ruston says investors have got it all wrong.
They've assumed that the big drop in oil prices means NAEP's business model is dead, he says, but nothing could be further from the truth.
"They think if oil prices are down, we're gone. The thing the market isn't getting is that we're in both mining and construction. So we do all that service work after the construction is completed," he says, from road building to overburden removal and even site reclamation.
"The environment is still robust. We've got Syncrude, Suncor and Albian (part of Shell's Athabasca Oil Sands joint venture project) with fully operational mines," he notes.
"Then we've got (Shell's) Jack Pine mine that's being built, and CNRL's (Horizon) mine about to come online, so it's unstoppable. We've got an enormous volume of work up there."
NAEP also has earnings and revenue growth. For the first half of fiscal 2009, ended Sept. 30, net income totaled $17.9 million or 50 cents a share, versus a net loss of $5.4 million or 15 cents for the prior-year period.
Revenues jumped almost 38 per cent, to $539.3 million, and gross margins reached 17 per cent, up from less than 13 per cent a year ago.
For the full year, ended Mar. 31, 2009, consensus estimates on Bay Street call for earnings of about $1.47 a share on revenues of more than $1.1 billion, up from earnings of $1.11 a share last year on revenues of $981.3 milion.
"I'd say earnings stability is likely, and growth is still possible," says Ruston. The ongoing global credit crunch doesn't appear to be a threat to the company's viability, either.
"Our business is very robust, we're cashed up, we've got good access to cash, and we've got very good finance facilities in place. We've got a revolving credit facility for $125 million which we draw down on sometimes, and we've got cash on our books so we're very comfortable with our cash position."
On the asset side, NAEP has a fleet of equipment that Ruston estimates is worth roughly $400 million, or more than three times the company's entire market cap. And even that's a lowball number, he reckons. The replacement value of the fleet would be about $700 million, he says.
Like many in the oilsands industry, Ruston says the current slowdown is really a blessing. It's helping to bring costs under control, alleviate chronic labour shortages, and allow for more orderly development.
"What people aren't taking into account is that an enormous part of the contributing factor to increased costs was the oil price itself. When I was out on the road two years ago (talking to investors) I said a slowdown in the oilsands would not hurt anybody," says Ruston.
"Instead of jobs being done all on top of each other, they'll be done more sequentially. And when they're done sequentially, you're able to get more effective materials utilization, your purchasing programs are more subdued, and it's done in a more common-sense fashion."
One person who isn't necessarily happy with the slowdown is Mrs. Ruston. Seems she recommended that Ruston consider exercising more of his stock options when the company's shares were trading at much higher levels. He didn't.
"My wife runs my pension fund and she said, 'You know, you've got a lot of options tied up and you should sell some.'
"Instead, I said to my wife, 'No, this is a great buy.'
What I currently own: FWIW :O)
Company Name
GENERAL CABLE CORP-DEL NEW (BGC)
BORALEX POWER INC FD TR UNITS (BPT.UN) *
MEDICAL FACILITIES CORP INC PA (DR.UN) *
GENIVAR INC FD TR UNITS (GNV.UN) *
HOME EQTY INC TR UNITS (HEQ.UN) *
DDJ HIGH YIELD BOND FD (HYB.UN) *
ING GROEP N V PREF CTF 7.3750% (IDG) *
KILLAM PROPERTIES (KMP) *
MORNEAU SOBECO INC FD UNITS (MSI.UN) *
NEWALTA INC FD TR UNIT (NAL.UN) *
NEW FLYER INDS & NEW FLYER IND (NFI.UN) *
NORTHSTAR HEALTHCARE (NHC) *
NORTHLAND POWER INC FD TR UTS (NPI.UN) *
COLLECTIVE BRANDS (PSS)
CDN REAL EST INVESTMENT TR UNI (REF.UN) *
SPROTT (SII) *
STUDENT TRANSN AMER LTD (STB)*
SUNTECH PWR HLDGS CO ADR (STP)
VANGUARD NATURAL RES LLC (VNR) *
CML HEALTHCARE (CLC.UN) *
The issues with an '*' have yield.
75% cash.
Tax-loss selling may be silver lining in 2008 bear market cloud
Some strategies you can follow
Jonathan Chevreau
Financial Post
Thursday, November 13, 2008
This autumn's stock market crash has produced little but bad news for most advisors and their clients. But as the end of the calendar year approaches, there may be an opportunity to salvage something through tax-loss selling.
In normal years, tax-loss "harvesting" is a subdued affair, consisting of profit-taking in non-registered accounts with equal amounts of tax-loss selling, the objective being tax neutrality after all transactions.
There are four special tax strategies advisors can deploy in a down market, says Sandy Cardy, vice-president of tax and estate planning for Mackenzie Financial Corp. Despite the heavy losses most investors have sustained this year, "the tax system can offer some relief -- and you may even get a refund of taxes paid in prior years."
That assumes, of course, that you know the rules. The basic one is that the only losses that can be claimed for tax purposes are losses that have actually been realized. Paper losses don't count, however painful they may be -- you must actually sell the stock (or units in a mutual fund or exchange-traded fund) and book a loss in order to reap any tax benefits. To constitute a loss, the Adjusted Cost Base (ACB) must be greater than the proceeds of the disposition: the liquidated securities.
Remember too that tax-loss selling applies only to taxable or non-registered portfolios. Many clients will have serious losses in their RRSPs and RRIFs as well, but there is no relief on that score. Clients will have lost both capital and precious contribution room -- arguably the best shot will be to hold on and hope markets recover. That's a conversation advisors will have to conduct with each individual client.
Another basic is that an allowable capital loss is one-half of a capital loss. "Allowable capital losses incurred in any year must first be applied to reduce any taxable capital gains (one half of capital gains) from the same year or else they are forfeited," Cardy says, "If you have no taxable capital gains, the loss cannot be used against other income."
Thirdly, if your allowable capital losses in 2008 exceed your taxable capital gains in 2008, you will be left with a net capital loss. These can be carried back and applied against taxable capital gains realized in any of the three preceding years (2005, 2006, 2007). "If you use the carryback provision you can decide which year(s) to apply the losses against," Cardy says, "Normally, however, you want to use them against the gains of the earliest of the three years first (years 2005) as the oldest carryback years expires first."
If the losses aren't carried back, they can be carried forward indefinitely into the future to reduce only taxable capital gains (or in the year of death or year preceding death, may also be applied against any form of income). "Building
Tax-loss selling applies only to taxable portfolios up some losses now to apply strategically against future gains can smooth income and reduce tax at future marginal tax rates," Cardy suggests, "Your gains can be applied as little or as much as you want each future year - you do not need to use them all at once."
Those who wish to trigger some losses for the 2008 year cannot wait till December 31st. Cardy suggests selling no later than Wednesday, December 24th to ensure the settlement date occurs in the 2008 tax year.
The mechanics of claiming a loss against a prior year's capital gain is simple. It can be done while preparing for the next tax filing season. You must fill out Form T1A, known as a "Request for Loss Carryback," and file it with the tax return for the year in which the loss arises.
Many Canadians will need to factor in the probable capital gains from the buyout of telecommunications conglomerate BCE Inc. Indeed, assuming the deal closes on or around December 11th, BCE may prove to be a capital gains oasis in a sea of losses elsewhere in portfolios. In recent months, the combination of the bear market and uncertainty whether the deal will consummate has meant BCE has been trading at a discount from the $42.75 the Ontario Teachers Pension Plan has agreed to pay. Assuming the deal goes through at that price, investors will have only two weeks to calculate their gains and trigger comparable offsetting losses in other securities. As Cardy notes in a backgrounder on the topic, such "forced dispositions" can be a wonderful opportunity for advisors and clients to discuss portfolio rebalancing.
Even without offsetting gains, absolute capital losses give investors a chance to recoup past income taxes. Cardy cites the example of a $50,000 net capital loss for 2008. Upon filing your return in April 2009, this $50,000 loss could be applied against taxable capital gains from a previous year and generate a tax refund of $23,000 in Ontario [more in some provinces] or as little as $19,500 in Alberta.
What if a client believes a losing stock may eventually recover? Here you need to be aware of the rules against "superficial losses." Tax rules deny a loss for tax purposes if you trigger a loss and acquire the identical security within 61 days (30 days before the sale and 30 days after). Best to wait 31 days and hope the stock doesn't take off -- it likely won't since tax-loss selling by others will likely keep prices depressed at year-end.
Ironically, there are no rules against "superficial gains." You can book any gain and reinvest right away, with the benefit being a step-up in ACB. That will reduce the tax bite on any future gains on the security, Cardy says.
Finally, as of the 2006 federal budget, you can avoid capital gains on some securities by donating them to charity, a strategy that may appeal to BCE investors. You can also donate-in-kind stocks that have fallen in value: you generate both a capital loss and you get a donation receipt for the fair market value of the donated stock.
Some oilsands math
Gary Lamphier
The Edmonton Journal
Thursday, November 13, 2008
One day, it would be nice if the oilsands bashing lobby deigned to explain a few things to the rest of us.
Such as. If the oilsands are shut down -- as the good folks at Greenpeace would very much like -- or even significantly scaled back, where will the billions of dollars in federal equalization money that Alberta's (oilsands-dependent) taxpayers ship to Ottawa each year, come from in future?
Just wondering. It's a small-minded little nitpick, I realize. With Ontario now a "have-not" province, and the country's manufacturing sector flat on its back, you'd think Quebecers, among others, might like to know. Especially in the middle of a provincial election campaign.
Perhaps someone in the national media will ask. Ya think? I won't be holding my breath.
Seems it's OK in Canada to be outraged about the oilsands, since they're far away, and thus easy to demonize. But it's not OK to ask about the $8 billion in equalization money that Quebec receives every year, or where those funds come from. Unless you're the premier of Ontario, of course, in which case you're entitled to whine about equalization for as long as you wish.
Fact is, no oilsands means no equalization cash from Alberta taxpayers, who currently contribute more than $3,000 per capita each year to the feds than they get back in federal services. Not that anyone is complaining, mind you.
Simply put, the future of Alberta's oilsands isn't just an environmental issue. It's a national economic issue. Especially since Canada's economy now appears to be heading into the ditch, along with the U.S. With more than 40 per cent of the taxes generated in the oilsands flowing to Ottawa, their demise would obliterate the federal budget, and affect federal spending programs across the country. Yet, the enviro lobby never seems to get around to mentioning this. Or the national media.
It's not that I don't appreciate it when Council of Canadians chief Maude Barlow, actress Neve Campbell, or their eco-warrior soulmates take time out of their busy schedules to fly out here to the frontier for a few photo ops. Clearly, their recent visits took real commitment. Not to mention excellent speechwriting skills. I particularly enjoyed Barlow's slick put-down of the oilsands by likening it to the bleak kindgom of Mordor, in Lord of the Rings. How awfully clever of her. As for Campbell, the Scream Queen managed to look both fashionable and "horrified," as she put it, during her all-too-brief visit to the ol' tar pit, which was conveniently captured by a Vanity Fair photographer.
Sadly, the glamorous Hollywood star had to jet off to Paris shortly after her brief stopover in Oilberta. I look forward to her return. Maybe she'll deign to talk to us plebeians in the local media next time. Or not. Must be oh so demanding to be both a horror flick star and an environmental expert.
Jokes aside, these are indeed difficult days for the oilsands, one of the few remaining engines of Alberta's -- and Canada's -- sputtering economy.
With oil prices plunging to the mid-$50s from a July peak of more than $147, major oilsands producers like Suncor, Canadian Natural Resources and Nexen have put major expansion projects on hold, putting thousands of future construction jobs in jeopardy.
Yet, Barlow and other oilsands critics talk as if it's still 2006. They complain about "out of control" oilsands expansion plans, even though newspapers like The Journal have been reporting project delays for months.
Similarly, other oilsands bashers blame Canada's soaring "petro currency" for the demise of Ontario's manufacturing sector, even though the loonie has been plunging against the greenback for months.
While it's true that the loonie did make manufacturers less competitive last year, when the dollar spiked to $1.10 US, it's also true that Canada's manufacturing problems run far deeper than that.
More than a quarter century ago, amidst a sharp recession in the early 1980s, I wrote a long cover story for a national magazine on Ontario's manufacturing woes. The title of the piece? The Decline of Ontario.
At the time, dozens of Ontario manufacturing plants were shutting their doors, laying off workers, and moving to places like Mexico or Georgia, where labour costs and taxes were lower. Eventually, North America's economy rebounded, and Ontario's manufacturing sector came roaring back. A few years ago, Ontario supplanted Michigan as the single largest supplier of motor vehicles in North America.
Now, the province's manufacturers are again in deep doo doo. But it's not solely because of the once-lofty loonie. It's also because Ontario's entire manufacturing sector, like Quebec's, is built on a branch-plant model.
It's almost entirely dependent on the prosperity of parent companies -- notably Detroit's struggling Big Three automakers -- that are based elsewhere, and invest most of their research and development money in the U.S.
If Ontario's manufacturers had invested more money in R&D over the years, and more money in advanced equipment to become more competitive, the soaring loonie of 2007 wouldn't have inflicted so much pain.
But you won't hear that from the oilsands haters. It doesn't fit their script. Or their tidy little agenda.
glamphier@thejournal.canwest.com
Anderson's day finally comes
Cam Cole, Canwest News Service Published: Tuesday, November 04, 2008
No less vivid than any of these memories of the 1980s Edmonton Oilers is that of Glenn Anderson under a head of damn-the-torpedoes steam, with a half-step on the defenceman, holding him off with one hand while cradling the puck with his stick in the other, driving to the net off-balance, on one skate, and somehow spiriting the puck past the goalie while jaded reporters stifled grins and looked at one another, thinking: "How'd he do that?"
In fact, the now 48-year-old son of a Burnaby, B.C., fisherman was such an enormous piece of the puzzle for a team that won five Stanley Cups in seven years - he scored so many goals, playoff goals, big playoff goals, playoff overtime goals - that from 2002 to 2007, the members of the Hockey Hall of Fame selection committee had to fudge the truth when asked: "Why isn't he in?"
But it was never about the credentials. Those were impeccable.
It was about Glenn being Glenn. Like Manny being Manny.
Anderson last played in the NHL in 1996, so by 2001 he was eligible for Hall admission.
"Not without a ticket," said the committee, which, in the years after having to expel Alan Eagleson from membership, was wary of anyone whose character flaws might embarrass the Hall down the road.
And heaven knows, Glenn Anderson had some.
But maybe he's sorted a few of them out, in middle age. We can hope. So, apparently, can the Hall of Fame.
Anderson was sitting in the middle of Manhattan's Columbus Circle, just off Central Park, with his six-year-old daughter Autumn, when the National Hockey League found him Tuesday and put him on a conference call with reporters, in advance of his induction next Monday - with former Canuck and Red Wing Igor Larionov, linesman Ray Scapinello, and longtime Western Hockey League boss Ed Chynoweth - to the HHOF's Class of 2008.
Only once did he refer to the length of the wait for approval. Only once did he admit that "off-ice activities" might have been what kept him on the outside looking in, while players like New York Islanders' Clark Gillies (179 fewer goals, 402 fewer points, two fewer Stanley Cups) and Bernie Federko and Cam Neely, whose playoff points combined don't add up to Anderson's (and neither of whom ever won a Cup) made it into the Hall.
"It's up to the committee, and the committee changes every few years. It's hard to judge what gets you in or keeps you out," Anderson said. "Is it ‘You have to do this, this and this' or does what you do off the ice, is that material or immaterial? I don't really know what the guidelines are. Was it stats? Was it championships? It's not written in stone."
What it was, the thing that kept him out, was a brief relationship with a then 27-year-old student in Edmonton that produced a son whom, after nine years, Anderson stopped supporting. The case went to court, Anderson pleaded that he was broke despite owning two houses in Turks and Caicos. It was sordid stuff, and by the time it was all over, "dead-beat dad" might as well have been tattooed on Anderson's forehead.
That was six years ago, right around the time he and his wife Susan, who now live on New York's Upper West Side, were having Autumn. Still making a small income through occasional appearances on behalf of the Rangers, with whom he won his sixth Cup in 1994, Anderson sounds a little more grown up, perhaps, but not exactly like your average hockey player.
This is one of the Hall's most eclectic classes, a group that underlines why it isn't just the NHL Hall of Fame. Think of it: a pioneer of the Russian hockey emigration, a junior hockey builder, a linesman . . . and an extraterrestrial.
That would be Anderson, whom some journalist dubbed "Mork" in his Oiler days - after the Robin Williams TV character from space - because he came across as a smart-ass, a bit aloof, or just plain weird.
"I'm really glad I don't march to the same drummer as everyone else," he said Tuesday. "I think if anything, it's an attribute."
Not many Canadian kids had made it out of U.S. colleges in those days, but Anderson had. Coach Marshall Johnston at Denver University set him on a path that would take him to the Canadian Olympic team in 1980 and, before he was done, time served with hockey clubs in Edmonton, Toronto, New York, St. Louis, Finland, Germany, Switzerland and Italy.
He always was, and remains, a complicated dude. On one hand, the whole dead-beat dad thing. On the other, his relationship with Father David Bauer, the iconic head of Canada's Olympic hockey program for a generation, who was still around - though not coaching - the 1980 squad.
"It jump-started (my career)," he said. "To be part of an Olympic program at a time when they were all amateur athletes . . . whatever energy I had left at the end of a day, Father Bauer would summon me over to the monastery there in Calgary by the 4-H club. We had endless conversations about the human spirit and the political end of (hockey), that the North American league is not the only league, there are other options, if you don't happen to make it you can fall back on schooling or ... it really opened my eyes to a broader picture.
"I don't want to say that my hockey career was just in the professional ranks in North America, I was very proud and honoured to be part of Team Canada and international competition and wear the Canadian maple leaf proud. And hopefully I did my country justice by representing them."
In the 1980 Olympics, Canada finished sixth, ending with a 6-4 loss to the Soviets - "God, I cried for two hours straight after we lost to the Russians. We were winning going into the third period," Anderson said, a few years later - and then the Olympic program was dissolved.
Anderson, feeling betrayed, "settled" for playing with the Oilers, who had drafted him in 1979 in the fourth round. The team's ability to amass a Murderer's Row of incredible talent over a few years in the draft - Kevin Lowe, Mark Messier, Anderson, Jari Kurri, Paul Coffey, Grant Fuhr - didn't say much for the world of professional hockey scouting at the time, he said.
"The draft really pulled that team together, and the players just revolved around Gretz - I mean, when you're playing with the best player in the world, you start doing things you never even dreamed about doing."
Five Stanley Cups later, he was traded to Toronto with Fuhr, but he would win one more Cup before he was done. Though there wasn't much left in the tank, he scored three goals for the Rangers in the 1994 playoffs. Two of them were game-winners.
He didn't waste many.
"As I get closer to the day, we get to reflect on a life history, and what transpired, and how did I get where I am? And the more I think about it, and talk to other people, the more things pop up. The memories just come back in floods," he said.
"It's an unbelievable honour, and I'm humbled by it. I don't know what kind of plaque or picture of me they'll have in there, but I hear there are ghosts in the Hall of Fame, and I could just imagine my picture probably looking right at Father Bauer or Glen Sather, and some day, when the lights are out and nobody's there, I could hear Slats going: ‘It's past curfew, you better go back to bed.'"
'Herd of negativity' tramples Alberta's good-news story
National media ignore signs pointing to continued growth, economist says
Gary Lamphier
The Edmonton Journal
Thursday, November 06, 2008
Edmonton / Richard Corriveau has a bone to pick with the media -- the Toronto-based national media, in particular -- and I think he's got a point.
Corriveau's beef? One-sided, overly simplistic, obsessively negative coverage of the economic slowdown in Alberta.
While Ontario and Quebec do face some tough challenges, Corriveau -- Canada Mortgage and Housing Corp.'s regional economist for the Prairies and territories -- says Alberta is in far better shape to weather the storm.
Sure, a slowdown in Oil Country is underway, he concedes, after years of overheated growth. But contrary to some of the gloomy headlines he's seen in the national press, the sky isn't falling.
"We're not suggesting that we have a shield around this province, but we are forecasting that Alberta will remain one of the growth leaders into 2009. We'll remain one of the strongest economies with one of the strongest labour markets," says Corriveau, who addressed the 2008 CMHC Housing Outlook Conference at the Shaw Conference Centre on Wednesday.
Unfortunately, Corriveau says that central message doesn't seem to be getting out. The media, he complains, seem much more interested in trumpeting bad news, such as spending cuts or project delays. And that's likely to exacerbate whatever downturn is at hand.
"We think it's good not to join in with the herd of negativity," he says.
Even when there's positive news in Alberta -- as there was Tuesday, when oil prices soared, sending the Toronto Stock Exchange's main index up nearly 400 points -- Corriveau pointedly notes that one national paper simply ignored it.
Instead, the lead headline in the paper's business section the next day focused on the record $8.45 billion in assets that "panicked investors" pulled out of mutual funds in October, which it dubbed a "month of fear."
"You pick up a newspaper the day after oil prices increase by nearly $7 (US), and the TSX has rebounded 400 points to in excess of 10,000, and I didn't see much commentary on that. Yet I'd argue that if it had gone the other way, we certainly would have," he argues.
"I think the media have their role to play. But I'm not certain the debate is balanced. So we've tried to present in our outlook some of the bright spots we see that are simply being ignored."
Example: Alberta's huge lineup of major capital projects, totalling more than $286 billion as of September. The tally includes more than $210 billion of energy projects, and $37 billion of infrastructure and institutional projects.
Sure, some major oilsands projects have been delayed recently in the wake of the credit crunch and the drop in oil prices, Corriveau says. But he's confident those projects will get built, once markets stabilize.
"Mothballing is a term that's been overblown. We don't believe projects are being mothballed. Rather, there will be a slower pace of capital spending, with some projects being deferred.
"As a result, we likely won't see production starting for some of these projects until later."
The bottom line? Slowdown or not, Corriveau forecasts continued growth in Alberta through 2009, even as North America flirts with recession.
"We do not believe Alberta is going into recession -- I'd like to make that perfectly clear," he says.
Corriveau expects Alberta's economy to grow by 2.1 per cent in 2008 and 1.9 per cent in 2009, on an inflation-adjusted basis, after expanding at a 3.3-per-cent clip last year and 6.6 per cent in 2006.
And while job losses are mounting in Central Canada's troubled manufacturing industries -- notably the auto sector -- Corriveau sees continued employment gains in Alberta, at a rate of 2.6 per cent in 2008 and 1.3 per cent in 2009.
In fact, he says labour shortages are likely to persist in Oil Country, even as migration levels
rebound.
With first-half data already in the bag, Corriveau expects net migration to hit 56,000 in 2008, and 51,000 next year.
Although that's still below the massive inflows the province recorded at the height of the economic boom in 2006, when Alberta attracted more than 70,000 net new migrants from elsewhere in Canada or abroad, it's up sharply from last year's inflow of about 43,200.
On the housing front, Corriveau expects average home prices to stabilize in the wake of the correction that's been underway since mid-2007.
He projects a slight increase in sales volumes and a modest uptick in average Alberta home prices to $356,000 in 2009, from $353,500 this year. While the market for single-detached homes is
already strengthening, however, the multi-family market will continue to struggle until inventories fall.
Nonetheless, the expected pickup in net migration levels is likely to help, and there are few indications that existing homeowners are feeling overly stressed by the economic slowdown, he notes.
The percentage of mortgages in arrears remains low, in historic terms, and the ratio of equity to home prices remains near the record highs recorded last year.
In a nutshell, Corriveau figures the economic news for Alberta remains pretty positive. As a member of the media, I'd like to be more negative, of course, but I've got to call a spade a spade. Hope you can handle that.
glamphier@thejournal.canwest.com
'We've gone over a cliff,' says Sprott CEO
Joanne Paulson
The StarPhoenix
Tuesday, November 04, 2008
Eric Sprott might as well have thrown a pail of cold water over the room.
Spirits were high after a humour-laced speech by Lawrence Joseph, chief of the Federation of Saskatchewan Indian Nations, at the Canadian Aboriginal Minerals Association (CAMA) conference Monday.
But Sprott's view of the global financial situation brought attendees back to Earth with a thud.
"We've gone over a cliff," said Sprott.
The chair and CEO of Sprott Asset Management, who called the global financial system "a farce" in October 2007 -- a year before the meltdown -- does not think it's over for the crashing markets and commodities.
"It's been a very difficult time for everybody. It may . . . get a lot worse."
Sprott seems to have had second sight in his predictions. In January, he welcomed people to the meltdown of 2008; and last November, he described U.S. lending institutions such as Freddie Mac and Fannie Mae as "dead men walking."
Today, he says, "we do not have a financial system." This is because banks continued to expand their balance sheets based on very little capital and had perhaps five per cent equity on the books. After the crash, he believes bank equity is zero.
Every time Sprott hears a finance minister, anywhere in the world, say the banks are sound, he thinks, "you're a liar. Your banks are not sound."
No wonder no one is lending any money. And that's bad news for resource companies trying to explore or expand -- or even continue producing, he said.
"There is no lending. So, for example, all the expenditures in the oilpatch will be cash flow from production, less bank payments."
Only three things have held their value, said Sprott: Cash, treasury bills and gold. When he got to Saskatchewan, he realized potash is also holding on; but no banks own potash, he said.
Surviving this market won't be easy, he warned. "Think carefully about where you have your money," he advised the First Nations representatives in the room -- and everyone in general.
Gold is one of the few places to hide some resources, he said -- and when Sprott means gold, he means real gold, such as coins and bars of it. So many people are hoarding bullion that sales of wall safes have skyrocketed.
"We have had such a massive printing of money, it would augur well for gold to hold its value," said Sprott.
He also hopes after today's U.S. election, "oil will go back to where it should be."
Sprott believes oil prices are low and the fundamentals of the market support a higher price. Production is dropping at a number of big oil plays, while the less-developed world will increase its demand.
"We need to replace a Kuwait or Nigeria with these declines," said Sprott.
Because of the declines and the inherent demand, Sprott believes the "natural price" of oil is "north of $100," or $100 US per barrel.
© The StarPhoenix (Saskatoon) 2008
Pipeline through mountain parks complete
Kinder Morgan careful of environmental risk
Dave Cooper
The Edmonton Journal
Tuesday, November 04, 2008
EDMONTON -- The new large-size Trans Mountain pipeline, which traversed some the world's most beautiful -- and environmentally sensitive -- landscape through Jasper National Park and Mount Robson Provincial Park, is complete.
Kinder Morgan Canada said Monday the Anchor Loop project, a new 36-inch (91-centimetre) diameter line between Hinton and Jackman, B.C., just west of Mount Robson, is now operational. The new line runs beside the existing 24-inch (61-cm) line, which has been deactivated but could see service again in the future.
The 62-km Mount Robson section was built during the summer and finished ahead of schedule. The 97-km Jasper section was completed in April.
The disturbed Jasper land was restored over the summer. Next summer, Mount Robson will get the same treatment.
"Next year's work will be critical to this park," said Mount Robson park supervisor Wayne Van Velzen.
"The company has done a wonderful job, but we are keeping a pretty close eye on this," he said.
The B.C. provincial park official says Kinder Morgan "is setting a good example of how this kind of work should be done."
Greg Toth, project director for the Trans Mountain project, said the company is keenly aware the public is watching.
"This is a unique project. We had a choice of two routes, but managed to put all but one kilometre of the whole 160-kilometre line in the same right of way as the existing line," he said. "We went as close as two metres."
The firm also recovered seeds and had them grown in greenhouses so the Jasper route could be replanted with appropriate vegetation.
The $527-million Anchor Loop, part of the Trans Mountain line expansion called TMX1, twinned the line through the parks to increase capacity from 260,000 to 300,000 barrels a day. Unsure if it could ever return to the parks to build new pipelines, Kinder Morgan overbuilt the parks segment.
"We can only go through here once, so we built for the future," said Toth.
The existing lines outside the park are still 24-inch. The next phase, when the market develops, is to increase the line from Edmonton to Hinton with a new 36-inch line, and do the same to the section from Jackman to Kamloops, B.C.
A third phase would see a new 36-inch line all the way to Vancouver and the Puget Sound area of Washington State.
As well, oil could go through a spur line to a tanker dock at Kitimat, B.C.
The additional large-sized lines would increase overall capacity to 400,000 barrels. Eventually, both the 24-inch and 36-inch lines could transport a total of 700,000 barrels a day of various products, from heavy crudes to refined products like gasoline. Eventually, the 24-inch line would be used solely to ship refined products.
The existing 1,150-km Trans Mountain system is the only direct pipeline link that transports crude oil and refined products from the Edmonton area to the Vancouver area.
The market along the Pacific coast for crude from the Alberta oilsands is expected to grow as Alaska's Prudhoe Bay crude shipments decline due to natural depletion.
dcooper@thejournal.canwest.com
© The Edmonton Journal 2008
Cool-down period for oilsands is hardly a crisis
Many industry executives privately relieved by slowdown in overheated sector
Gary Lamphier
The Edmonton Journal
Thursday, October 30, 2008
EDMONTON - It's been fashionable of late for the national media to write off Alberta's oilsands -- yesterday's favourite frontier boom story -- as just another bit of roadkill on the Superhighway to Economic Armageddon.
With key players like Suncor and Petro-Canada recently delaying big spending decisions on future oilsands projects, the casual observer in Ontario or B.C. might well assume Alberta's bitumen boom has gone kablooey.
Perhaps that's the whole idea, I don't know. It's certainly one way to keep your workers from moving to Oilberta. But nothing could be further from the truth.
As Scotiabank commodity guru Patricia Mohr sees it, oil prices have already bottomed, and will likely rebound to the $80 US range by late 2009. That should be robust enough to support the build-out of most oilsands projects.
Let's be clear. With the U.S. economy heading into the tank, and oil prices down 54 per cent from their July high of $147.27 US, the oilsands are clearly in slower growth mode. No question. But they're hardly in crisis.
The oil and gas industry has always been cyclical. Most industry execs anticipated a slowdown, and many are privately relieved it's here. Only fools and cheerleading speculators dreamed oil prices would hit $200 a barrel. Now that speculators have fled the commodities markets, sanity has returned.
In any case, after years of overheated expansion, huge budget overruns, chronic labour shortages, skyrocketing material costs and stubborn infra-structure challenges, the oilsands needed a cool-down period. Now it's here.
By stretching out construction schedules, this will help bring inflation down, and ease the pressure on suppliers, workers -- and the environment. Emissions growth will slow, and Alberta's proposed $2-billion carbon capture system will have more time to roll out properly, alongside new projects.
Sorry, but tell me again. What's the downside here? I don't see it.
By the way, there's no need to worry about the financial health of "legacy" oilsands producers like Imperial, Syncrude and Suncor. They won't be passing the hat anytime soon, trust me.
Even before Wednesday's sharp rally in oil prices, which pushed crude for December delivery up more than seven per cent to $67.50 US a barrel ($82.68 Cdn), they still boasted fat profit margins.
Calgary-based FirstEnergy Capital pegs cash costs for Imperial's in-situ Cold Lake operation at just $30 (Cdn) a barrel. At Syncrude's mines, it's $43 a barrel. And both these estimates include royalty payments.
Newer projects won't be as profitable, but they're still well into the gravy. The first phase of Canadian Natural Resources' new Horizon project, due onstream next month, should generate positive free cash flow at just $40 US a barrel, says UBS Investment Research analyst Andrew Potter.
At $60 a barrel, Horizon 1 should generate an internal rate of return of 12.5 per cent. At $100 a barrel, that soars to 17 per cent.
Likewise, Nexen/OPTI's Long Lake 1 project, which should start producing its first oil in a few weeks, should generate positive free cash flow at $30 US a barrel, Potter says. At $60, the internal rate of return hits 10 per cent.
EnCana's SAGD (steam-assisted gravity drainage) projects at Foster Creek and Christina Lake also boast robust economics, says Potter, as does Husky's Sunrise SAGD project.
Sure, the economics for new, fully integrated -- mine and upgrader --greenfield projects like Petro-Canada's $24-billion Fort Hills mega-monster are dicey at the moment. No surprise there.
Credit remains tight, and with markets gyrating wildly, Petro-Canada and its partners would be courting disaster to proceed in this environment. But Fort Hills will surely resurface once oil prices rebound, as they will. And it will be cheaper to build in a couple of years than it was during the boom years.
Meanwhile, China, India and other emerging economies will continue to grow. Their energy demands will expand as well. The tightness in world oil markets will return, once the current economic problems subside.
In fact, for those who can see beyond the next week, month or quarter, it's abundantly clear that the seeds of tighter oil markets tomorrow are already being sewn today. As new oilsands projects and other new supply around the world gets delayed, it will only accelerate the process.
"In fact, OPEC recognized that at their last meeting. They said they felt it was important to try and shore up prices because they were afraid of project cancellations. So basically, in the medium term, supplies might become quite short again," says Mohr.
Although she admits the furious pace of the decline in prices for oil, base metals and other commodities caught her by surprise, she remains convinced that the long-term trend in prices remains up, not down.
"What I see is continued growth in emerging markets. Even though people are very negative about global growth at the moment, I still think China will grow at a reasonable (8.3-per-cent) pace next year. And once we get out about 18 months, I think commodity prices could well start to lift again."
glamphier@thejournal.canwest.com
© The Edmonton Journal 2008
Thu, October 30, 2008
Loner poet
Rock icon Bob Dylan doesn't pander to fans, he just delivers
By MIKE ROSS, SUN MEDIA
Publicity-shy Bob Dylan performed an intimate concert at Rexall Place last night.
For cynical observers of pandering, manufactured pop stars who don't do anything without first checking with their fans, Bob Dylan is a breath of fresh air.
The theory is this: If you don't care what people think, if you play your music only for your own enjoyment, if you're honest about what makes you happy, if you value artistry over entertainment, then you will perform better. People pick up on this, and the audience is happy, too. Everybody wins.
Of course there's got to be a limit before it slides completely into self-indulgence. Doesn't there? Don't ask Bob. He's not talking. Just ask: What crazy thing is he going to do next to please himself -and how will we talk ourselves into loving it this time?
Last night's show at Rexall Place is just another example of Dylan being able to do whatever the hell he wants, safe in the knowledge that his devoted fans will eat it up, delighted merely that he shows up - or maybe he really doesn't care. Audience? What audience? He's got the wealth. He's got the critical acclaim. He's got the Pulitzer Prize. He doesn't have to do this, you know. So he's obviously doing it for fun, staging the neverending Dylan tour, this time supporting an ironic album of old-timey grooves called Modern Times, yet again hailed as a masterpiece by professional music critics the world over.
So if Dylan wants to stage what came across as a low-budget, gritty blues jam in some rural honky tonk, that's his perogative as the "poet laureate of rock 'n' roll." He wants to play organ all night? So he did, noodling relentlessly on his fake Hammond. He wants to blow one of his gloriously inept harmonica solos in almost every song? Go to it! He does it because he can. And if he finds satisfaction in "re-imagining" his classics to the point that the listeners can play "guess that tune," who are we to stop him?
Following a taped fanfare and florid introduction, the opener - a thumping shuffle - took just a moment to identify. It turned out to be Rainy Day Women No. 12 & 35, otherwise known as the "everybody must get stoned" song. Some folks in the crowd of 9,000 took their cue and lit one up. Bob, meanwhile, toyed with the melody the way a bored cat plays with a doomed mouse.
Kind of sounded like it, too. Yes, that trademark raspy bray was in fine form last night, booming straight through his nose as the loudest thing from stage. In the legacy of great singers who can't sing, Dylan is king, and yet for all his unique, oft-parodied delivery, you can tell that he always knows where the right note is. He just often chooses not to sing it, that's all. Again, he's entitled. He's got a class 1 poetic licence.
From a sloppy ending on Rainy Day Women, Dylan and his black-hatted band whipped into a pair of familiar tunes: It's All Over, Baby Blue and Stuck Inside of Mobile With the Memphis Blues Again, each taking at least one verse to identify due to their spindled arrangements, folded grooves and mutilated melodies. He was dogged by reports of bad sound and incomprehensible vocals on earlier dates of this tour, but I'm happy to report the sound wasn't too bad last night; you could actually understand what he was singing, at least half the time.
Now that's something.
Dylan's current touring band was competent, if unspectacular, lacking the bohemian edge of some previous stage combos, and guitarist Charlie Sexton was sorely missed. But generally speaking, the rootsier the song, the better these guys sounded, at its best with instrumentation like upright bass and banjo on some of the Modern Times material.
With only the most basic of stage lighting (and no video screens so you could get a really good look at him; perish the thought), at times you really did get the sense this was a boozy blues jam, especially in new songs like The Levee's Gonna Break - another barroom shuffle - where it seemed like everyone was soloing at the same time. It actually sounded pretty cool. The sonic benefit of musicians pleasing themselves was demonstrated several times last night, and yes, the audience definitely picked up on it.
Dylan didn't say anything to the crowd, of course, and if there was any subtext to be read into his material - all sorts of his 60's classics take in new meaning today - it was left to the listener. Hey Bob: Would it kill you to say "Hello, Edmonton!" just once? No, that would be weird. We love Dylan for who he is: a rock 'n' roll maverick, a cryptic bard, the ultimate anti-showman who seems to revel in doing the opposite of what every other rock star in the world does.\ SOUNDCHECK\ MAIN EVENT
Bob Dylan
IN THE SEATS
9,000 in Rexall
NOTE PERFECT
A low-tech blues jam that showcases artistry over entertainment
RATING
4 out of 5
More upsides to our economic downturn
Gary Lamphier
EDMONTON
Saturday, October 25, 2008
EDMONTON - Hi there. It's me again, Zippy (a.k.a. Mr. Happy Talk). Huh? You say you're getting tired of my annoying,
sugar-coated blather while your stock portfolio melts into oblivion?
Well, so am I. Trust me, this silver-lining-behind-every-cloud shtick doesn't come naturally. I'm a born skeptic. I hate spin. So this will be the final instalment in my weeklong effort to bring joy to a depressed world.
But I'm also a contrarian. So now that the rest of the planet has jumped ship and piled into the life rafts, I'm inclined to ease back in my deck chair, order another tall drink, and uncover the good news behind the ugly headlines.
Oddly enough, even now, it's not hard to find. Take high gasoline prices. Just two months ago, every newspaper and TV newscast was filled with stories about drivers gouged at the pumps, as prices soared past $1.30 a litre.
Well guess what? With oil prices below $65 US a barrel, gas prices have also plunged. On Friday, drivers could fuel up at some local stations for as little as 92.9 cents a litre. That's a drop of 30 per cent. And it's not only regular folks who will save a bundle. So will all the vehicle fleets used by our fire, police and ambulance services. A welcome break for the city's budget planners.
It's also a huge break for taxi fleets, trucking companies, utilities like Epcor and Atco, telecom firms like Telus and newspaper carriers.
Meanwhile, Alberta's inflation rate, which topped six per cent a few short months ago, is down to 2.8 per cent. That's more than half a point below the national average of 3.4 per cent. Good news for everyone.
Another thing. The plunging loonie -- as I noted Thursday -- has softened the big drop in energy prices for Alberta's producers. Even at current prices, oil still fetches more than $81 Cdn a barrel.
That's almost exactly what it was worth when the province released its 2008 budget last spring.
The sagging loonie, now below 79 cents US, is also boosting the bottom lines of hundreds of Alberta firms that sell into the U.S., the Middle East, Russia and other parts of the world where the greenback is the reserve currency.
Companies like Upside Software, ZCL Composites, Micralyne, Matrikon, McCoy Corp. and a boat-load of others.
"If you were sitting here like me and absorbed in our business, you'd have no idea there was a recession coming. We're busier than we've ever been," says Ashif Mawji, CEO of Upside, a contract software-management firm whose clients include such U.S. giants as Intel and Proctor & Gamble.
"This year we're projecting 30-per-cent growth in revenues and a doubling of our profits," he adds, as every downtick in the loonie boosts Upside's bottom line. Nearly 70 per cent of the firm's revenues are generated in the U.S.
Matrikon, an Edmonton-based industrial-software firm that generates 40 per cent of its revenues in the U.S., is another big winner. After suffering $700,000 in foreign exchange losses in 2007, it's now booking handsome gains.
As a result, Matrikon expects to post record profits of about $9 million, or 30 cents a share, on revenues of some $80 million for fiscal 2008, and the company recently announced its second special dividend.
"The opportunities for our company look really good. The business looks really solid, we've turned the corner from a year ago, and as results have shown we've made some dramatic improvements," says Nizar Somji, Matrikon's CEO.
The economic slowdown and the recently announced delays in key oilsands projects should also make it easier for Matrikon to recruit engineers and other qualified staff, he says. The company, which has more than 520 employees worldwide, is currently trying to fill 20 to 30 staff positions.
Over at McCoy Corp., it's a similar story. The diving loonie has helped the maker of drilling-rig power tongs to boost its revenues and earnings outside the country, even as activity in Western Canada slumps.
"It's pretty significant to McCoy -- very positive to our bottom line," says CEO Jim Rakievich. "We do export a lot of products in U.S. dollars outside of Canada, particularly to the drilling equipment market."
Like Matrikon, the foreign-exchange losses McCoy suffered last year, when the loonie soared to $1.10 US, have turned to foreign-exchange gains. About 45 per cent of McCoy's exports go to the U.S., with the rest destined for customers offshore who also buy in U.S. dollars.
Even the widely publicized delays in major oilsands projects have a silver lining. For years, environmentalists -- and former Alberta premier Peter Lougheed -- have complained about "out of control" development in the oilsands.
Suddenly, the pace of development has slowed sharply. That should be good news for the environment, for overstretched engineering firms, for construction firms and other suppliers.
It should end the era of rampant cost inflation, and give the entire oilsands industry a chance to catch its breath. Honestly, is that really so bad?
Hmmmm.......
Bummer
2008-09-08
Whitewater Welcomes New Owners
Knee Deep Development Corp. is very pleased to announce the have purchased Whitewater Ski Resort from Mike and Shelley Adams.� Lots of exciting plans will roll out over the next few months and will be posted on the website.
2008-08-11
The Pending Sale of Whitewater Ski Resort
Mike and Shelley Adams are very pleased to announce that they have accepted an offer for the pending sale of Whitewater Ski Resort to a Calgary based company, Knee Deep Development Corp. The sale will be finalized at the end of August after a standard period of due diligence with the new owners taking over the resort operations on the 31st.
Mike and Shelley have been involved with Whitewater since 1985 and have worked hard to find a group of like minded owners that will take the area to the next level. "We are very pleased with what we are hearing from this new group and feel that we are leaving Whitewater in good hands" says Mike.
The new owners, Dean Prodan, Andrew Kyle and Mitch Putnam, all based in Calgary, are enthusiastic supporters of Whitewater and fully recognize the importance of Whitewater to the local Nelson economy. The group intend to move forward with the Master Development Agreement that is already in place but as avid skiers appreciate the uniqueness of the area and will work towards maintaining Whitewater's culture.
The first step has been to appoint a new General Manager, Brian Cusack. A long time Nelson resident, Brian comes with an impressive resume in the ski industry. Most recently employed as the GM at Castle Mountain, just outside Pincher Creek, Alberta, he comes to Whitewater with a strong background in ski area development and is looking forward to a much shorter commute!
Further details will be released once the new ownership is in place.
Tue, October 21, 2008
Dion still living in dreamland
By NEIL WAUGH, EDMONTON SUN
I guess it was the pooping puffin after all.
Maybe it was the talking oil blob or any of the other goofy stuff the fat frat boys with the sticky-up haircuts in Stephen Harper's war room threw at Stephane Dion during the federal election campaign.
In the buildup and execution of the election, all the parties - with the exception of Gilles Duceppe's Bloc Quebecois, which rocked - came up a day late and a dollar short.
Yesterday the election-that-wasn't claimed its first victim when the Liberal leader finally emerged from his "consultations" after a week of working the phones and fell on his sword. It was either that or suffer a death by a thousand cuts by surly party members.
He didn't lose the election because he was an aloof academic with a one-plank Green-Shift platform that called not only for a massive tax hike, but the rape and pillage of the part of the country still holding its own in the economic storm.
Nope, there were other sinister forces out there. As he explained to his adoring Parliament Hill press gallery subjects yesterday: "All of you know it was not a tax hike," Dion sighed at his long goodbye press conference.
"I was told I gave a good performance," he continued. "But it was not enough."
Apparently there are two Stephane Dions. One was portrayed by the pesky Tories as the nutty professor who wanted to impose his "tax on everything" then trickle it back in a confusing stew of tax credits and other tweaks.
"Canadians didn't know this Stephane Dion," he said.
The public did, however, get to know the other one.
"The one that they have seen in their living rooms for almost two years before the campaign started," he said. "They believed that character was real," Dion continued. Same goes for the Green Shift, or Green Shaft, if you happen to feed your family and pay your taxes working in Alberta's hydrocarbon economy.
"Canadians went to the ballot box thinking it was merely a carbon tax and they would have to pay for it," he said.
Except in Alberta where we would have to pay for it twice.
"They never knew what (it) meant for their family," said Dion. "We failed to explain that."
Now that wrecking Alberta's economy is on the Liberals' back burner, Dion is vowing to make it his life's work to "ensure that my successor be protected against this kind of propaganda we were unable to react to."
The diminished Liberals are deep in debt and Dion, now a lame duck as Grit boss, is reportedly still in the red from his leadership campaign. Dion didn't say how he plans to build up the bucks to match the Conservatives' media buying power.
Meanwhile, the professor lives in a surreal world of denial.
"I still think if we had been equipped to explain why I am fighting for my country, what kind of a leader I would have been and what kind of a policy we were proposing, I would have won the election," Dion beamed.
More ironic is that Dion also appears to think he somehow saved Canada from the separatists, even though the Bloc Quebecois won 50 seats in Quebec and Captaine Canadien's Liberals took just 13.
Now he says he wants to "protect" the next Liberal leader. "The image the Conservatives gave to me is cemented in the minds of too many Canadians," he said.
Alberta's Enterprise Minister Iris Evans - whose job it is to protect those industries the Ottawa Liberals were plotting against - popped Stephane's balloon yesterday.
"It was a wealth shift," Evans spat. "It never was a Green Shift. It was the long green of your money that shifted,'' she said.
"I don't think I've ever seen such an insensitive policy," the Refinery Row rep continued.
"He certainly couldn't sell it in Alberta," Evans continued. "I thought there were so many ways it was flawed and obviously Canadians felt the same way."
Cue the puffin.
If oil continues to climb, then most players in the sands may have a chance to make $$. Many won't get it off the ground if it hangs in the 70's or 80's.
Good luck.
mb
Tough sledding for new projects
Exisiting ops are viable I think.
BWTFDIK
As to what the break-even oil price is for these operations, Lacey says the way to look at it is the cash cost per barrel to operate. The cash cost calculation typically includes operating costs, including expenses such as general and administrative costs, royalties and interest expense.
He says Suncor's all-in cash cost is $46 a barrel, with $33 being associated with operating costs. Canadian Oil Sands Trust pays out $43 per barrel, of which $27 is related to operating expenses.
Meanwhile, Imperial Oil's Cold Lake operations are the cheapest to run -- $30 per barrel, with $17 being the operating component.
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=25078784
For that comment..no! Its true my friend.
Its not a viable program if oil is under $100 bbl. Its a path to bankruptcy for some of those guys. Therefore oil must rise!
mb
I take it you are tongue in cheek
Yes...oil sands is a non event with low priced oil.
No one wants to speak much of it as it revolved around high crude prices and the promise of great profits.
Oil sands is now DOA. Dead- On- Arrival
The funeral arrangements are now being made. Sniff sniff....
mb
Is it game over for the oil sands?
PIERRE FOURNIER
Globe and Mail Update
October 20, 2008 at 6:00 AM EDT
Other than the potential for a severe economic recession, the development of the oil sands is likely the most important economic and political issue for Canada for the coming decade. Based on present expectations, the oil sands will host at least $170-billion of investments during this period. Canada is already the main oil supplier to the U.S., and proven oil resources in Alberta are second only to Saudi Arabia.
The challenges remain daunting. The costs of mining and upgrading the resource have skyrocketed, and the break-even point for new projects is close to $85 (WTI) a barrel, an increase of $20 from just a year ago. Volatile oil prices, coupled with environmental and regulatory risks, and the massive investments required for long-term returns, have led many existing and potential players to adopt a more “prudent,” that is, conservative, approach. Over the last few months, the stock market correction has been particularly devastating for the oil sand players.
Is it game over for the oil sands? More than anything, the future of the oil sands will depend on U.S. commitments to finance their development and buy the oil. In the U.S. presidential race, energy independence has turned into a mantra and a national obsession. There is every reason to believe that the next president will take aggressive steps to diversify sources of energy and stop buying oil from “our enemies.”
U.S. multinationals are no match for the state-owned monopolies from China, Russia and India, among others, who are aggressively seeking to lock up a sizable chunk of the world's scarce oil and gas supplies, with little regard for long-term profitability. The world's top 10 oil producers are state monopolies and account for 77 per cent of total production. The largest U.S. company, Exxon, ranks 12th.
In addition, many oil rich countries are overtly hostile toward the United States. Venezuela has largely expropriated American oil companies, and is doing all it can to avoid shipping its oil to the U.S. Iran is working with its neighbours and China to build pipelines to ship its oil and gas to India and China. Nigeria will remain unstable for the foreseeable future, and Chinese companies are slowly but surely securing the country's resources. Russia is gradually squeezing out foreign producers.
Even “friendly” countries, including some of the Arab states and Brazil, are increasingly aggressive, seeking ownership stakes, ever-higher royalties and taxes and mandating investments in local industries and infrastructure.
This rapid collapse of its ability to secure long term oil supplies has made the U.S. dangerously vulnerable to oil price spikes, and has put a heavy burden on its military, which is at least partly responsible for securing continued access to foreign oil. It would be naive to believe that the world will become a more friendly place for America in the next decade. The opposite is likely.
The strategic interests and the needs of the U.S., coupled with Canada's desire to maximize the benefits of the resource, will lead to the continued and perhaps accelerated development of the oil sands. Balancing the economic, political and environmental stakes will be a formidable challenge.
First, should other foreign players be shut out? It could be argued that multiple investors and buyers would help maximize the value of the oil sands, and that Canada should not be dependant solely on the U.S. markets and U.S. upgraders and refineries – but should instead favour the construction of pipelines to ship some of the supply to other foreign markets. Also would the rejection of large-scale Chinese investments, for example, be viewed as “discriminatory” and contribute to the further deterioration of Canada's relationship with China?
Second, with the private sector unable or unwilling to guarantee the large-scale development of the oil sands in the long run, major multibillion-dollar bilateral agreements between the U.S., Canada and the producing provinces seem likely. The options could include guaranteed long-term contracts at fixed prices, investments in technology to enhance output, reduce costs and carbon emissions, as well as subsidies and various fiscal incentives.
While the oil sands in Alberta and Saskatchewan will produce positive economic impacts in other provinces, their development will be a highly contentious and potentially divisive issue for the country, perhaps eventually posing a threat to national unity.
All of Canada's opposition parties are, to varying degrees, skeptical or opposed to an accelerated development of the oil sands. Central Canada is pushing back on environmental concerns, including restricting the pace of development and adding costs to clear up emissions. Does central Canada really believe they can impose costly restrictions on the oil sands, while at the same time enjoying the economic spinoffs and increasing share of the tax revenues generated? Given its minority status, the Conservative government will find it challenging to reconcile the conflicting visions and interests of the producing and non-producing provinces.
Ultimately, however, the coming U.S. election and the severe correction experienced by oil sands equities – which currently reflect a long-term oil price of less than $50 a barrel – will undoubtedly present opportunities for the investor. Harsh geopolitical realities and the need for energy independence will trump all other considerations in realizing the potential of Canada's oil sands.
Ron Hiebert
Sun, October 19, 2008
A brief guide to busts, manias and greed
By RON HIEBERT
Einstein once said that the difference between genius and stupidity is that there is a limit to genius.
Stupidity, it seems, has once again trumped the geniuses on Wall Street.
They designed complex algorithms to protect the world from the effects of all the toxic financial instruments they were concocting. Instead, they created two bubbles, one financial, the other real estate.
Both are bursting at the same time, punishing both the greedy and indifferent alike with the financial consequences of a global recession.
Why is it that we never seem to learn the vital lessons? Booms that drive asset values grotesquely upwards are ALWAYS followed by busts, which vaporize the previous gains.
The aftermath in all cases is devastating, yet we seem to learn nothing.
Manias are created when three conditions exist.
The first catalyst is called the game changer. It can be a significant technological advance like the development of the Internet or a major financial innovation.
New products like collateralized debt obligations, credit default swaps and special investment vehicles caused the current bubble. This fancy terminology hypnotized people into believing that the risk of giving people loans that they don't have the ability to repay could be eliminated.
The estimates of how much Wall Street Fat Cats generated in fees from mortgage-related investment banking since 2003 range as high as $2 trillion. When it began to leak out how obscene the profits were from playing this financial shell game, everybody wanted in. Big profits can make a believer out of almost anyone.
Bubbles also need the easy credit that is caused by too much liquidity. American households today have $7.4 trillion in bank accounts and money market funds and another $4.1 trillion stashed in U.S. treasuries and other types of short-term bonds. That totals $11.5 trillion in accessible cash that is sitting in low-paying interest bearing accounts looking for a more profitable home.
This isn't just an American phenomenon. The rest of the world is also awash in money. Massive liquidity prompts the lax lending required to fuel a mania.
The final catalyst in bubble formation is the abandonment of long-term metrics for valuing assets. Sir John Templeton said "The four most dangerous words in investing are 'It's different this time.' " When the old benchmarks are tossed aside by investors who believe that they are living in a new paradigm, the sky becomes the limit as to how high valuations can be pushed.
When these three conditions come together to create a boom/bust cycle, it always blindsides investors.
Humans, it seems, are very good at learning specific lessons but lousy at transferring that experience to the bigger picture. We gathered from the Internet bubble that tech stocks were risky and should be avoided. We didn't grasp the broader principle that to escape financial ruin, we should avoid overpriced and overhyped assets of all kinds.
This inability to transfer the lessons from past bubbles to future ones means that we seem destined to keep repeating the same economic folly over and over again.
Sad! I actually was beginning to think we were smarter than this.
Ron Hiebert is a portfolio manager and director, wealth management at ScotiaMcLeod. He can be reached at ronald_hiebert@scotiamcleod.com
Diesel shortage affects industry
Neil Scott, With files from Sylvia MacBean
Leader-Post
Friday, October 17, 2008
Saskatchewan truckers haven't been getting enough lately -- and it could be bad news for the province's economy.
Al Rosseker, executive director of the Saskatchewan Trucking Association, said problems at several Alberta refineries have combined to put diesel fuel in short supply.
"Basically, there are problems with three refineries in Alberta,'' Rosseker said.
Two of those refineries have temporarily shut down diesel production during a shutdown period while a third is not producing at full capacity.
"There's not enough diesel,'' Rosseker said.
While trucks continue to roll down Saskatchewan highways, Rosseker said some truckers have had to reduce operations because of a shortage of fuel. Smaller trucking companies particularly are having trouble finding enough diesel fuel, Rosseker said.
The situation could have ramifications for Saskatchewan consumers, as slowdowns in trucking deliveries lead to a shortage of products on store shelves, Rosseker said.
More than 90 per cent of the products sold in Saskatchewan are moved by truck, he said.
"When the trucks stop, the economy stops,'' he said.
The situation could even affect Christmas sales, if merchandise designed to be sold as Christmas gifts doesn't reach store shelves in time, Rosseker said.
The problem has existed for at least a couple of months and indications are that it will not be fully resolved until the end of November, Rosseker said. He noted products designed to be sold at Christmas need to be delivered to stores before the end of November.
One of the refineries that is now shut down is the Petro-Canada refinery in Edmonton.
Sneh Seetal, a spokesperson for Petro-Canada, said that temporary shutdown was planned as part of a reconfiguration of the plant.
Arrangements were made to maintain a supply of diesel for customers during the shutdown, Seetal said, but there was unfortunately some unexpected problems at other refineries which threw the contingency plans into disarray.
Service in Saskatchewan and across Western Canada has been affected, as incidents have occurred in which some service stations have run out of diesel fuel, she said.
Petro-Canada regrets the inconvenience experienced by customers, Seetal said. "Our customers have been very patient,'' she added.
The process of getting the Edmonton refinery started up again is slated to begin at the end of this month, said Seetal, who noted that process should hopefully be completed by the end of November.
Seetal said the supply problems with diesel fuel have been compounded by a strong demand for diesel fuel in Western Canada's booming economy.
The diesel shortage is also affecting oil drilling activity in southeastern Saskatchewan.
"I heard that as of Saturday, 28 rigs were shut down. Nobody can get diesel," said Shianne McArthur, administrative assistant at Eagle Drilling. "Fortunately, we were able to get enough for our rigs."
Alfie Hoffman of Precision Drilling Trust in Calgary said the company is watching the situation closely.
"Yes, we are aware that there are diesel shortages and we are managing our business accordingly," Hoffman said.
Neil Waugh
Thu, October 16, 2008
Advantage, Quebec
By NEIL WAUGH
It's Wednesday morning coming down from the federal election and Ed Stelmach puts his own unique spin on the deal.
"Some partied, some cried," the Alberta premier sighed. "Let things settle down."
It's not certain what Steady Eddie did on election night after wearing a self-imposed gag throughout the entire event, despite Alberta's hydrocarbon economy being the designated whipping boy of all four national campaigns. And Bloc Quebecois leader Gilles Duceppe's whipping boy, in particular.
But there was no doubt what Duceppe was doing after he miraculously turned back the Tory tide in his province, wrecking Stephen Harper's party.
Yesterday, the bowed-but-not-entirely-beaten prime minister issued what you could easily take as a public apology to his party and his Alberta supporters in Calgary.
Where he said he now has to listen to "other voices."
And none was braying louder than Duceppe, who urged the PM yesterday to "respect the democratic choice" of the Quebec people, and be less "partisan" and "authoritative."
Except Gilles was only getting warmed up.
There was no Toronto Maple Leafs hockey sweater on Duceppe's Christmas wish list. But there was lots of other stuff.
That would include stimulating the Quebec economy, support plans for manufacturing and forestry, restore economic development cuts and culture grants, do something for the unemployed and fix Quebec's alleged fiscal "imbalance".
But most of all to "reduce Quebec's dependence on oil and transfer $820 million a year for education."
This was the Bloc Quebecois's constant theme during the campaign. And you can bet Duceppe's not going to drop it now after the pounding Harper's Conservatives took in Quebec. Despite doing everything, including declaring Quebec a "nation" within a country, to elect more MPs.
"Reduce oil dependence" is a sneaky way of saying implement Kyoto. And transfer all the carbon tax and cap-and-trade booty from Alberta's thriving energy economy to Quebec's failed rust-belt industries.
"For Quebec, it means profits," Duceppe beamed during the campaign. "It means a lot of money."
He's not about to let up now that Harper has voices rattling around his noggin, and yesterday demanded the PM "take account of the Quebecois reality."
To some extent, Harper did, telling reporters how he wants to "make sure some of the diversity of opinions are incorporated into the government's programs."
And how he now wants to "try and listen more where we haven't taken a hard position."
That's what a second minority government will do to a guy.
But listen to who? Because Stelmach also released his post-election shopping list.
Sadly, it wasn't the one many Albertans may have felt he was suppressing for the last six weeks for fear of scaring off Harper's thin southern Ontario support.
It only contained three vague points.
The first is the "harmonization" of Canadian climate-change plans, even though the Alberta PCs had earlier refused to buy into a national carbon-cap-and-trade scheme.
And Albertans should be thankful for that.
The list also calls for a definition of the bitumen export ban that Harper sprang on the unsuspecting Stelmachistas near the end of the campaign. Especially how it applies to "dirty" oil imported to Quebec and other eastern refineries.
Stelmach also wants "predictability and consistency" when it comes to climate change and energy policy.
Because it's apparently scaring off the international investors with the billions to keep the Alberta boom rolling along, although the capital market meltdown and gyrating energy prices might have something to do with it.
Yesterday, EnCana CEO Randy Eresman blamed market conditions for the delay of his corporate split.
"After last night there was a clear thumbs-down for the carbon tax," Stelmach said.
"That's a huge relief."
But it was pretty obvious he hadn't been told of Duceppe's demands and the voices in Harper's head.
"Canadians were concerned about jobs and they were concerned about the economy," Stelmach continued.
"Even though it's a minority government, I'm of the firm belief we've settled this issue of the carbon tax," he insisted.
Not with Gilles Duceppe - and not Ed Stelmach - now setting the national agenda.
Neil Waugh
Wed, October 15, 2008
It could have been worse
By NEIL Waugh
No one said anything going into this thing.
In fact, even to utter a word about a Harper majority in what is supposed to be the most Tory Blue province on the surface of the known world, was at minimum good enough reason for getting your mouth washed out with soap.
Albertans must not say anything for fear of upsetting the sensitive ears of Toronto commuter-belt soccer moms who Stephen Harper reluctantly pulled on his sweater and faked a smile for.
But after all that compromising, Albertans got essentially what they started with: a hung Parliament and an Alberta prime minister unable or unwilling to implement his province's agenda.
The PM started with Preston Manning's vow of "the West wants in" and hit an electoral brick wall last night when Harper's hope of a majority died in Quebec before the polls were closed in Alberta.
The one point of light on an otherwise gloomy horizon was the electoral shaft Liberal Leader Stephane Dion's Green Shift got and the inevitable political demise of the Nutty Professor and his scary idea to use Albertans and our thriving economy as the Ottawa Liberal Party's laboratory rats. The Shaft is gone. And Dion will soon follow it out the door.
Even more distressing was the performance of Ed Stelmach and the Alberta Tories throughout the campaign.
Going in it, it was as obvious as an oil stain on a white T-shirt that Alberta-bashing would be a central theme of the campaign.
Bloc Quebecois Leader Gilles Duceppe as early as two years ago was running an envy ad campaign attacking the province's energy wealth.
While all five national parties had some form of gotcha in their policy documents to strip wealth out of the province, it was Duceppe who took it to new lows. The Quebec wedge issue of the campaign may have been Harper's arts-funding speech in Saskatoon.
But it was the Alberta agenda that drove the Bloc's big electoral clawback from a position going in where the BQ were being written off as irrelevant and doomed Harper's chances of a majority.
In the dying hours of the campaign Harper pleaded to Quebecers that he isn't "the devil in a cowboy hat" as Duceppe has been portraying him.
"He says that because I come from Alberta that I serve the oil companies," Harper blurted. If only it were true.
By then the damage had been inflicted and the hopes of a majority - that looked so bright on Sept. 26 when Harper had a 15-point lead over Stephane Dion in the polls - were done like dinner.
While this constant attack against Fortress Alberta was taking place, Premier Ed Stelmach's foolish strategy was silence is the best offence.
He had two excellent opportunities in the final days of the campaign to take Albertans' message back east and tell like it should be.
But his speeches in Montreal and Toronto were weak regurgitations of the old "partners in prosperity" theory, where Alberta's energy bucks trickle down to the rest of Canada.
All Albertans are really asking for is a "fair hearing." Unfortunately nobody was listening where it really counted.
When Harper hit Toronto last week to deliver what should have been his economy-saving speech, he gave a strange talk about Canada being like Noah's Ark.
It opened him up to attack that the Tories had no plan for the financial meltdown, except the Bank of Canada had already cut the bank rate, announced a program to buy up the toxic asset-backed paper and was within hours of pumping billions more into the country's banks.
A speech telling it like it really is may have given him the win he - and Albertans - clearly needed. Last night Stelmach issued a statement congratulating Harper on his "victory" and pledged to "work together to move our country forward." The best you can say is, it could have been worse.
Oil patch veterans to go public
Seek $210-Million; Duvernay execs launch new oil venture
Carrie Tait, Financial Post Published: Thursday, October 09, 2008
CALGARY - At least three star oil and gas management teams are raising hundreds of millions of dollars in the market right now to kick start new private companies, all as many institutional investors are loath to invest in these illiquid energy outfits in light of the crippling credit and equity markets.
The executives behind Duvernay Oil Corp. -- hot off selling their company to Shell Canada Ltd. for about $6-billion in July -- have set out to raise roughly $210-million, sources say. One of these sources said healthy demand for the offering has allowed them to increase the deal to about $300-million. It is expected to close later this month. The new company is being marketed under the name Tourmaline Oil, the sources said.
"In the face of just an awful, awful energy sector market, that's quite a bit of money to raise," one of the sources said. "That's a real marquee name. Those don't come around very often."
Canetic Resources Trust's old management team is also in the market, and set to raise $300-million under the banner of CanEra Resources, one of the sources said. The last team to run Rider Resources Ltd., which was bought by NuVista Energy Ltd., have also made the rounds raising funds. Tourmaline does not have
any assets yet, a typical strategy for startups launched by high profile oil patch players. Insiders, institutions and high-net-worth individuals are the likely buyers.
The apparent success of these fundraising drives flies in the face of the difficulties many private oil and gas companies are battling. Some institutional investors are demanding an annualized return on investment of up to 50% before pouring money into private outfits.
One oil and gas specialist at a London-based hedge fund said his firm has cranked up its target annualized return on investment to "30% if I really like the idea, 50% if it is not top of my list of things I have to do."
This marks a sharp jump in expectations: This time last year, the firm would have invested in a private oil and gas company with expected returns as low as 20% to 25%. The new standard for rates of return is not limited to just Canada -- companies around the world now have to clear this bar before money pours into their coffers, the hedge fund source said, noting his competitors are also searching for similar comfort zones.
"We can wait for [companies] to go public, prove up the concept, buy in and still make a lot of money, because no one is going to give [them] credit right now," the source, who asked not to be named, said. "It really is liquidity -that's the key on everything right now."
The private companies now have to compete for capital against their public kin. The net asset values of public companies have been slashed as investors flee, making these liquid investments more attractive.
The fact that the Tourmaline is set to raise hundreds of millions of dollars in these messy markets is a testament to the success of Duvernay's principals, who sold that company to Shell for $83 a share in July, up from its initial public offering price of $10.50 per share in February, 2004. Prior to the IPO, it financed itself privately, with a $6.25 per share offering in July, 2003, and a $3.50 per share offering in Sept. 2001
---------
INVESTOR ANGLE
In the Duvernay deal, non-insiders can buy 15 million shares at $7 each, raising a total of $105-million. Tourmaline founders can buy 15 million shares at $3.50, for a total of $52.5-million, and then must buy an additional 7.5 million shares at $7, again totalling $52.5-million. The insiders have the option of purchasing another million shares at $7, one of the sources said.
Put it all together and the deal is sized between $210-million and $217-million. However, given the success of the original Duvernay team, and the amount of private money that has been sidelined as the market teeters, this deal may have already ballooned.
Westport JV to sell three new LNG trucks models in 2009
2008-10-14 06:43 MT - News Release
Mr. Michael Gallagher reports
PETERBILT ANNOUNCES AVAILABILITY OF THREE FACTORY-INSTALLED LNG CONFIGURATIONS THROUGH STRATEGIC PARTNERSHIP WITH WESTPORT INNOVATIONS
Peterbilt Motors Co. will offer three new liquefied natural gas (LNG) configurations on its models 387, 386 and 367 in 2009. The factory-installed LNG system is part of a joint agreement between Peterbilt and Westport Innovations Inc. to provide natural gas versions of select Peterbilt aerodynamic and vocational vehicles.
"LNG is emerging as an alternative clean, high-performance fuel for trucks that is domestically available and economical. Peterbilt is committed to delivering products that reduce harmful emissions and realistically provide the performance and economics that our customers need," said Bill Jackson, Peterbilt general manager, and PACCAR vice-president.
Michael Gallagher, president and chief operating officer of Westport, added: "Peterbilt is a strong commercial production partner and brings a high level of expertise and production capacity to meet the increasing interest for LNG trucks. Peterbilt trucks were part of our first road trials, in a field test with Norcal Waste in San Francisco in 2001."
More recently, Peterbilt and Westport have collaborated on a project to build model 386 LNG evaluation trucks for Wal-Mart under a financing program with Mojave Air Quality Management District.
The LNG Models 387, 386 and 367 complement Peterbilt's existing Model 320 CNG vehicles. To date, over 50 Model 320 CNG trucks are in operation throughout the United States.
About Westport's ISX G and LNG system for heavy duty trucks
Westport's ISX G engine and liquefied natural gas (LNG) fuel system for heavy duty Class 8 trucks allows trucking fleets to move to lower-cost, domestically available natural gas and/or biogas while offering industry-leading emissions, including lower greenhouse gas emissions, than comparable diesel engines. Based on the industry-leading Cummins ISX diesel engine with cooled EGR, the LNG version of the engine offers the same horsepower, torque and efficiency as the base diesel engine it is replacing. The Westport LNG fuel system comprises LNG fuel tanks, proprietary Westport fuel injectors, cryogenic fuel pumps and associated electronic components to facilitate robust performance and reliable operation. The Westport LNG system is 2007 EPA and CARB certified to 0.8g/bhp-hr NOx and 0.01g/bhp-hr PM.
The Westport ISX G engine is fuelled with LNG-a safe, cost-effective, low-carbon and low-emissions fuel, and is available with 400-horsepower and 450-horsepower ratings, and up to 1,750-pound-per-foot torque for heavy-duty port, freight and vocational applications. LNG fuel tanks can be configured to suit customer range requirements. LNG heavy-duty trucks are eligible for federal tax credits in the U.S. and may be eligible for other state-specific emissions credits.
Yellowknife's water squatters won't be tied down
Residents relish freedom of floating houses
Trish Audette
The Edmonton Journal
Monday, October 13, 2008
Tony Foliot dips his coffee cup into the water of Yellowknife Bay, then takes a sip as he steers his motorboat, eyes on the multi-coloured houses floating at the foot of Jolliffe Island.
The water is his highway, his yard and his home.
He points out his own house -- two storeys, blue with yellow trim -- gently bobbing just a few metres from Yellowknife's Old Town.
"I built it a little bit at a time, like Johnny Cash," Foliot says.
He calls himself a second-generation "water squatter," part of a community that has staked out pieces of the bay for the last three decades.
Most of the 30 houses on the bay are built on barges kept afloat on empty fuel tanks welded together. Chains anchor the homes in place, and since they don't touch shore, the squatters don't pay property taxes because they don't own land.
"The water itself isn't municipal property, so we can't charge them," says Remi Gervais, a supervisor with the City of Yellowknife. "They're not on city land, so they can't be assessed the way the other properties are."
There is no regulation that says you can't live on the water, Foliot says.
Court proceedings in the late '90s proved that, when the city tried to establish what level of government has jurisdiction over the community.
"We're required under the territorial law to provide services to our neighbours if it's available," says Mayor Gordon Von Tighem.
That means the houseboaters receive emergency services and their children can go to school.
But they're on their own when it comes to sewage, for example.
"In general, they (have) a unique lifestyle and (the houseboats) are used in a lot of the promotional brochures," Von Tighem says. "They're a very self-sufficient group."
The mayor notes Jolliffe Island was home to some of Yellowknife's first houses. The territorial capital has long been known for its frontier-style living, starting with tent camps for gold miners that were eventually replaced by cabins and houses.
In the summer, most houseboaters paddle across Yellowknife Bay to get to the city. In the winter, they walk or drive across the ice. Autumn and spring are rough -- some stay with friends on the mainland, others manage to paddle around, through and over thin, slushy ice.
Foliot's house, which he started building in the early '90s, is set apart from the others at Jolliffe (including that of his wife). His greenhouse floats alongside, and flags for the City of Yellowknife and the French colony of St. Pierre and Miquelon flap on tall posts at the corners of his barge.
Originally from Dollard, a Montreal suburb, Foliot moved to Yellowknife in the late '80s. In those days, he says, people still built and rented little waterside shacks.
Now, land along Yellowknife Bay is being eaten up by expensive homes with big windows.
"It's not cheap to be on the water," Foliot says -- but it won't cost hundreds of thousands of dollars for the artists and musicians who take up residence, either.
"I owe no money. I can do whatever I want," he says.
When his home became water-worthy in 1993, Foliot estimates it cost $30,000 to put together. Earlier this year, one of the houseboats was sold for $100,000. Another, with three bedrooms and full plumbing -- including composting toilets -- is estimated at $150,000.
"It is a pretty tight little community," Foliot says. "There are all these twentysomethings that like being in the water, off the grid."
The freedom of living off the grid has its drawbacks, however.
Most people collect their own waste in biodegradable bags they later drive to a nearby lagoon for disposal.
People keep generators for electricity and Foliot, for example, does not have a fridge. He keeps everything in a cooler box on the shadowy side of his house.
The father of two says the positives outweigh the negatives. Growing up in Quebec in the '60s and '70s, he watched the forest that was once his backyard get paved over for suburbia.
His yard can't be paved this time.
"You wouldn't want to be tied up to the land, " Foliot says. "There's something to be said about having no neighbours."
taudette@thejournal.canwest.como
© The Edmonton Journal 2008
Proposed workers' camp a sore point in Gibbons
Ryan Cormier
The Edmonton Journal
Monday, October 13, 2008
EDMONTON -- Controversy is brewing in Gibbons over a Petro-Canada proposal to build a camp for 3,500 workers five kilometres outside of town. The temporary camp would house workers during construction of the proposed Fort Hills upgrader at the site.
When the upgrader project was first proposed, Petro-Canada thought there would be enough workers in the area that a camp would not be needed.
"Due to the skills shortage in Alberta, not as many workers as we thought will be from the local area," said Andrea Ranson, director of corporate communications.
Workers will need a place to live, and the Town of Gibbons itself sees no problem with a work camp.
"This camp will reduce traffic congestion at peak hours because workers will already be at the site," said town manager Maisie Metrunec.
Metrunec said the town has considered security concerns, but is satisfied that Petro-Canada's security will work with the RCMP.
Not all locals are as satisfied.
"A lot of these workers will be from out of province or out of country," said Barb Collier, who lives near Gibbons and is a member of Citizens for Responsible Development. "They have nowhere to go. They will be in that camp seven days a week and will get bored. There are crime concerns here."
Collier is also concerned with the camp's infrastructure and utility needs, considering it will have a greater population than some of the nearest towns, such as Gibbons and Bon Accord.
"This will put a strain on the whole system," she said.
Ranson said Petro-Canada is negotiating with utility providers and plans to use propane for on-site heating. There will also be a nurse and first-aid services on site, Ranson said.
Work camps have popped up around the province to house workers at major energy and resource projects. There are 27,757 workers spread across 57 camps in northern Alberta. Last year, there were 18,572.
Petro-Canada hopes for decisions from the Energy Resources Conservation Board by the end of the year.
There will be a public hearing to discuss the project Oct. 21 in Sherwood Park.
rcormier@thejournal.canwest.com
- - -
WORK CAMPS
Some of the biggest work camps counted in the 2008 census by the Oil Sands Developers Group:
- Poplar Point, Cheltick Lodge and McKay Lodge (Canadian Natural Resources): 8,259 workers
- Albian Village (Shell): 2,344
- Millennium Lodge (Suncor): 1,957
- Mildred Lake Lodge (Syncrude): 1,500
- Wapasu Lodge (PTI): 1,400
- Borealis Lodge (Suncor): 1,415
- Firebag Camp (Suncor): 1,291
- Athabasca Lodge (PTI): 1,200
- Beaver River Lodge (PTI): 600
I thought he was going to be on an ATV. Now that would be scary. lol
October 7, 2008
Don't rock boat, Capt. Ed
Here's hoping preem's team guides Alberta through whirlpool of financial markets
By NEIL WAUGH
On a day when the Toronto Stock Exchange crashed 1,200 points - or rebounded 572 ticks depending on what kind of a market mammal you are - Premier Ed Stelmach issued the following words of wisdom:
"We're holding firm," the premier vowed as the bears and the bulls were battling it out on the worst trading day since the computer-driven madness of Black Thursday.
"We'll be OK," he added.
And a quick glance at the first quarter budget update that Finance Minister Iris Evans released on Aug. 26 only adds to Stelmach's "why worry be happy" frame of mind.
In it she predicted that resource revenues will be an incredible $7.1 billion more than her spring guesstimate. Oil royalties - which were hardly going to beat the VLT take this year - were expected to jump $3.5 billion based on a new oil price assumption of $119US a barrel.
So big was the bonanza that the premier announced plans to scoop $4 billion out of the revenue fund to subsidize oil company carbon sequestration schemes and build rail transit in cities.
Of course, the stockies weren't the only ones feeling the heat yesterday.
In the commodity pits, oil traded as low as $87.81US yesterday, which is getting dangerously close to the $78 that the original budget was built on.
Although, natural gas and bitumen from the oilsands are now Alberta's most important natural resource revenue getters.
Now there's word that Evans has been huddling with her finance department money-crats.
The legislature smart guys tell me a third version of her 2008-09 budget may be in the works, especially when she held firm on her net Heritage Trust Fund income at $774 million.
This is based on a "fair value" of $17.1 billion as of June 30.
I wonder what it's worth these days?
As of now, Stelmach's much-delayed royalty reforms are still in the works and will be included in the legislative lineup when Government House leader Dave Hancock releases his list as early as Thursday.
But you can almost guarantee a last-minute push back from Big Oil to delay implementation of the "fair-share" law until the economic dust settles.
That may take a while after Auditor General Fred Dunn issued a warning to Alberta's financial sector last week, taking specific aim at the province's new superfund AIMCo over its real estate evaluations.
When you have $5 billion worth of property on the books, they better get it right.
Dunn also took a shot at ATB brass and the government bank's cabinet-appointed board of Tory good old boys and girls, after getting caught with $1.1 billion in the "asset-backed commercial paper" (ABCP) boondoggle and forced to take a $253 million provision for loss.
The patronage-appointment boards of the University of Alberta and University of Calgary also had ABCP losses of $41 million and $16 million.
Yesterday the Bank of Canada rode to the rescue with a $4-billion emergency bail-out package, allowing banks to use their all-but-worthless ABCP as an "eligible security" on what the B of C statement calls a "temporary basis."
Meanwhile ATB CEO Dave Mowatt goes on the legislature barbecue tomorrow morning - thanks to the excellent work of Edmonton Liberal MLA Hugh MacDonld who revealed that Stelmach's bizarre bank board showered Mowatt with $1.2 million in perks, performance bonuses and benefits above his already-hefty $406,000-a-year salary at a time when ATB was losing millions on the dodgy ABCP market.
"It's not limited to ATB Financial," Dunn warned. "It's all financial institutions who are dealing with real estate where there is high leverage."
Last week the Edmonton Real Estate Board issued its September stats.
Since last May's peak of $426,028, Edmonton's single family dwelling average has dumped $63,931 or 15% of value.
The equity hemorrhage on the Calgary Real Estate Board since the July, 2007 SFD high of $505,920 is $61,872 or 12.2%.
"Alberta is well prepared to ride out any difficulties in the markets," Stelmach reassured. Here's hoping.
http://ckua.org/
Home of the iHub Alpine Ski Team
http://www.skibanff.com/conditions/webcams.php
http://www.skiwhitewater.com/whitewater_snow_report.php
http://www.skimarmot.com/u/snowreport.phtml
http://www.powderhighway.com/mountain-vitals.php
oil/gas quotes
http://siliconinvestor.advfn.com/readreplies.aspx?subjectid=3540&nonstock=False&msgid=24139071
http://datasuite.cmegroup.com/datasuite-server/dataSuite.html?template=fut&productCode=CL&assetClassURL=http://www.cmegroup.com/trading/energy-metals/&header=new
http://www.upstreamonline.com/market_data/?id=markets_gas
http://www.ngx.com/
http://www.physics.uci.edu/~silverma/units.html
http://www.caodc.ca/
News
http://www.financialpost.com/
http://www.canada.com/edmontonjournal/index.html
http://www.edmontonsun.com/News/home.html
http://www.reddeeradvocate.com/
http://www.reportonbusiness.com/
Baltic Dry Index
http://investmenttools.com/futures/bdi_baltic_dry_index.htm
Mining reserve definitions: http://www.investorshub.com/boards/read_msg.asp?message_id=9170843
Grains:
http://canola.ab.ca/dailygrains.aspx
http://www.weatheroffice.gc.ca/forecast/canada/index_e.html?id=AB
www.dead.net/features/tapers-section
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |