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by Stockwatch Business Reporter
West Texas Intermediate crude for June delivery added 55 cents to $43.73 on the New York Merc, while Brent for June added 58 cents to $45.11 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.85 to WTI ($29.88), unchanged. Natural gas for May added 7.2 cents to $2.14. The TSX energy index added 2.63 points to close at 187.26.
The Alberta government has released further details of its revamped oil and gas royalty framework, building on the report that the royalty review panel issued in January. The report, indicating that Alberta was not planning to make sweeping changes to the existing system, was generally seen by the industry as favourable (it certainly could have been worse). The reaction is much the same now that the government has released the technical formulas for determining royalty rates and cost allowances. The Canadian Association of Petroleum Producers (CAPP) summarized, "In general, industry expects to generate comparable returns for comparable activity as under the old system." Even so, some analysts are hoping for tangible results now that the details are out. Eleven Scotia Capital analysts, in a 36-page research note about the royalty framework, reckoned this morning that the framework "removes significant uncertainty around the industry in Alberta. We expect this, along with spring 2016 bank line redeterminations, to spur deal flow within the industry in 2016."
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