This is really funny. I'm a shareholder in Kelt, and know people that work there, and though I wish they were valued at 3 billion, it's actually only 1.3: http://www.google.ca/finance?cid=917189836392542
but maybe you can blame that on the NDP too. Also, of course they're directing resources to their "CORE" area, that's why it's their core. Why not direct resources to your best testing plays? All their acquisitions in that area were done prior to the NDP getting elected, so good on them for having that foresight of the impending doom. Maybe Dave Wilson will have to tighten his purse strings and pull up his socks to make it through this, perhaps he can use some of the money from his 10 million shares of Celtic when it sold for $3 billion. Maybe that's the $3 billion you're thinking of?
sorry, they were a 3 billion valuation prior to the value of their reserves being gutted. Of course concentrating on a core business is always a good defence strategy, however, when what you're defending against is a new government in power, there's a fucking problem. Notely needs to realize that the vast majority of business in this province is conducted by juniors and midcaps, most of whom don't bootstrap their investments - they use VCs. Those VCs will just direct their capital elsewhere - some will go to BC, as in this case (take a look at their board to realize that there are 2 of bankers on it, out of 6 members - Robert Dales is the president of Valhalla Ventures Inc. and a director of Drako Capital, William Guinan is a partner at Bordner Ladner Gervais who does securities)
These stories will continue to trickle in. I hold Kelt too, and will continue to do so because of the location of their core assets and the competence of their management team, however, I do think it's too bad they're ignoring developing new land and a second major play closer to where they had success before as Celtic because the Government of the day has created an environment of uncertainty.
For everybody saying that they and others will drill if oil is higher, and that these announcements following the election are unrelated, investment in Alberta is predicated on a stable Government with low royalties. Our oil is extremely complicated and expensive to get out of the ground. The AFE to drill, complete and tie in a Duverney well sits around the 35 million dollars. That well pays itself about half out in the first year at $60 dollar oil, but the remaining half takes almost 4 years to pay out because of the way production declines. In oil and gas terms, that's a terrible investment, however, the reserves are so good that the estimated life of a well is around the 20 year mark. Since the investment already takes 5 years to pay out at current royalty rates, uncertainty about what the new royalty rates will be is delaying investment that was on the table before she was elected. It's nothing to do with oil prices - you just need to look at the neighboring monteney play in BC to realize that - your royalties are higher, but they're stable.
