Troubles with completing my first post, so here it goes again...
I can't speak for the heavy oil guys as our company is 80% gas. Here's how our "Profits" are calculated in the Natural gas business in today's environment (all numbers from my companies latest quarterly results)
Sale Price = $6.5/mcf (What people bought our gas for on a per unit basis)
LESS
Operating Costs = $1.3/mcf (What it cost us to operate our wells, etc)
AB Royalties = $1.6/mcf (25% of price; would rise to 30% or $1.95 under the new proposal)
G&A Costs = $0.3/mcf (Salaries, office rental, paperclips, etc; NOTE - the new royalty adds the equivalent cost of doubling our workforce & office space to our cost structure)
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Total Cash Left to Reinvest = $3.3/mcf
It cost most Junior O&G companies like ours approximately between $3.3/mcf and $4.3/mcf just to find & develop (F&D) new gas last year ($20-$26/barrel oil equivalent)
So you can see that in today's price environment we get back between $0.75-$1 for every $1 of investment ($3.3 / $3.3 or $4.3). Under the new royalty the numbers drop to $0.7-$0.9.
Our beef is not that we have to pay royalties, or even that they need to be adjusted, it is just that under the proposed system, at today's prices, you're making an unprofitable business even less profitable which means we have to curtail capital spending until either the service sector costs go down sufficiently (reduces our F&D costs; less work for the rural areas & associated communities) or the price of gas rises sufficiently to offset the higher service costs that go along with that increas.
Just my $0.02.
Tite lines, not tite government