If you have any doubts about how ACES changed the investment climate after it became law, now youll know. From my blog, ten days after ACES passed the legislature in 2007. Now it all seems so clear why under ACES we destroyed the decline curve by ten years. Meter Reader Page 1 A Weekly Analysis of Energy Stocks Using the McDep Ratio November 27, 2007 Avarice in Alaska Summary and Recommendation A newly enacted increase in the Alaska Petroleum Tax to a punitive 50% from 22.5% drives up long-term commodity price for oil and natural gas while it vindicates the stock repurchase strategies of buy-recommended ConocoPhillips (COP), ExxonMobil (XOM) and BP plc (BP). Because the price of oil is up and the producers are diversified beyond Alaska there is little impact on our currently estimated Net Present Value (NPV). The returns now being generated from past investments in Alaska are best distributed to investors rather than being reinvested under the changed terms of the fiscal regime voted by the Alaska legislature on November 16. The implications of higher price, induced by lower supply outlook, extend to natural gas as the long-delayed Arctic pipeline will likely be postponed for another generation, if not forever. Kurt H. Wulff, CFA
Posted on: Thu, 07 Aug 2014 20:39:14 +0000
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