Response of CAGC

CANADIAN ASSOCIATION OF GEOPHYSICAL CONTRACTORS

Royalty Review Panel's recommendations jeopardize employment and investment

CALGARY, Sept. 27 /CNW/ - The Canadian Association of Geophysical Contractors (CAGC) is disturbed by the recent Royalty Review Panel's recommendations. The report, calling for wholesale changes to the process and structures of royalties in Alberta, jeopardizes investment and employment inthe Canadian energy industry.

"Natural gas accounts for 65% of the drilling activity in Western Canada," says Mike Doyle, President of the CAGC. "

After a year of Federal tax increases, trust taxation, sinking natural gas prices and layoffs in the oil service business, the implementation of this report risks further job losses,lengthening and deepening the current downturn. We share the investment community's assessment that this report is draconian."

One in six Albertans work directly or indirectly in the oil and gas industry. The seismic industry reinvests the majority of its service and supply dollars in the communities of Alberta. The impact of economic down turns in our industry in this province has grave implications for the rural communities that have so strongly supported this government.

"The people of Alberta whose 'fair share' this report professes to defend are our employees, their friends and families," continued Doyle. "Removing two billion dollars from the industry that employs so many Albertans and placing it in government coffers, as this report proposes to do, is an odd way to help people. It is Albertans' hard work and investor capital, not some government program that created Alberta's prosperity. The economic multiplier effect of that lost $2 billion will be staggering, not to mention the loss of investor confidence that will result."

The CAGC represents the business interests of the seismic industry within the Canadian Oil and Gas Industry.

For further information: Mike Doyle, CAGC President, Ste. 1045; 1015 -4th St. SW, Calgary, AB T2R 1J4, P (403) 265-0045, F (403) 265-0025, Emjd@cagc.ca/