Tristone Capital's Response

This is Tristone's Assesment. Follow the link for the entire document. It is very well done and and quite appropriately delivers a scathing take on the document:

Our Fair ‘Economic’ Share – Tristone’s Alberta Royalty Review Assessment

We are publishing our assessment of the Alberta Royalty Review today. We believe both the data and process undertaken to determine the new regime were flawed and that the panel conclusions steer away from their underlying principles.

We further believe the $2 billion incremental revenue forecast by the ARRP is a fallacy and we actually expect the resulting plummet in deep gas drilling in the basin to reduce forecasted revenue increases by at least $2 billion. The proposed conventional royalty scheme provides no incentive for deep drilling, which we believe will drive 5% gas declines over the next decade. As a result, the government will receive a larger piece of a smaller resource royalty pie.

We recommend adding a third variable to the conventional royalty equation to incentivise deep drilling.

We also recommend rejecting the Oil Sands Severance Tax as it is overly burdensome on economics, particularly for bitumen projects. We recommend a more balanced royalty take on oil sands, that balances risk and reward for both producers and government.

We encourage investors, Albertans and other stakeholders to become engaged in the royalty review process and encourage the Alberta government to consider the economic consequences of the proposed royalty scheme. Full details are in our report.

Full report: http://research.tristonecapital.com/Tristone_Royalty_Review_07-10-01.pdf