CNRL blaming NDP for $405M net loss

[canadiantdi]

Canadian Natural Resources Ltd swings to $405-million net loss on Alberta tax increase

Canadian Natural Resources Ltd. reported a second-quarter loss, and even though the company is feeling the impact of low oil prices, it’s blaming the loss on the corporate tax increase imposed by Alberta’s newly elected NDP government.

Canadian Natural took a $579-million “deferred income tax charge” to account for Alberta’s decision to hike provincial corporate income tax rate to 12 per cent from 10 per cent, effective July 1. As a result of the charge, Canadian Natural reported a second quarter net loss of $405 million or 37 cents a share, compared with a profit of $1.07 billion, or 97 cents, in the year earlier period.

Without the charge, the company would have reported a adjusted earnings of $174 million or 16 cents a share. Analysts surveyed by Bloomberg and Thomson Reuters I/B/E/S had expected adjusted earnings of 10 cents a share.

The corporate tax increase was introduced by the government of Rachel Notley, who took office as Alberta’s first NDP premier on May 17.

Canada’s oilsands are pushed to the sidelines in new energy strategy
“This charge effectively translates into lower future cash flows and therefore, lowers reinvestment in the business,” said Corey Bieber, chief financial officer.

“Based upon third party research, this lower future capital reinvestment likely equates to about 4,100 fewer person years of direct, indirect and induced employment, with follow-on impact of higher income taxes on future income streams.”

Canadian Natural has been slashing development programs to deal with lower commodity prices and cash flow. During the quarter the company dropped its average production cost to $13.39 per barrel of oil equivalent, down from $15.35.

Total revenue for the second quarter was $3.42 billion, down 36 per cent from $5.37 billion a year earlier. Cash flow, a key indicator of the company’s ability to pay for new projects and drilling, was $1.5 billion or $1.38 a share, down from $2.87 billion, or $2.63 a share, a year earlier.

http://business.financialpost.com/ne...-expenses-fall

[elkdump]

Crude was selling as low as $44.20 USD at one point today as reported by NYMEX Online Reports,

I really doubt that has anything to do with the newly hatched NDP Albertastanee Government

[hal53]

It's not 4100 jobs...it's 4100 person years of employment

[Redfrog]

This is ridiculous!!!!

Why doesn't CNRL financial strategists ask that teacher that is in charge of energy for Alberta for some ideas.

CNRL should just borrow a ton of cash and run with no budget. That will make things look much better. The clouds will go away and that frown will turn upside down.

[canadiantdi]

Originally Posted by hal53

It's not 4100 jobs...it's 4100 person years of employment

Oops, you're right! My bad.

[hal53]

Originally Posted by canadiantdi

Oops, you're right! My bad.

...just accountant talk to either make it sound worse or better depending when it's used...

[rubberboots]

Originally Posted by canadiantdi

Oops, you're right! My bad.

So 4,100 person years divided by, say a 40 year working life, leaves you with just over 100 jobs. Not quite so sensationalist sounding.

[rugatika]

Originally Posted by rubberboots

So 4,100 person years divided by, say a 40 year working life, leaves you with just over 100 jobs. Not quite so sensationalist sounding.

Unless you're one of the 100.

[canadiantdi]

Originally Posted by rubberboots

So 4,100 person years divided by, say a 40 year working life, leaves you with just over 100 jobs. Not quite so sensationalist sounding.

You're right. I've asked the mods to change the title already.

It is still early in the 4 years though, we'll see what happens.

[rubberboots]

Originally Posted by rugatika

Unless you're one of the 100.

What? 1 of the one hundred that didn't get a job that wasn't created?

I didn't read it as layoffs...sounds like less hiring/job creation. Perhaps I misinterpreted the article.

[hal53]

Originally Posted by rugatika

Unless you're one of the 100.

..or they are talking about a 2 year construction project....the person years add up to a lot of people working then

[masalma]

Regardless of the numbers. Alberta relies on oil and gas, and with price of oil where it is, NDP shouldn't be kicking the dog while it is down.

[79ford]

http://www.imperialoil.ca/canada-eng..._20150731.aspx


These so called tax bills are largely non cash write downs accounting for future years of potential earnings hits. Like imperial has done cnrl is just factoring the tax adjustment into the business in one quarter. The company, imperial has only paid an extra couple million in taxes. Cnrl's actual tax bill increase might be a couple million bucks aswell.

How a two percent tax increase amounts to 500 million is saying that they are factoring in 2% of a future 25 billion in profits or 6-25 years of operating. They are lumping it all into one quarter essentially.

To the average person it sounds alarming but in reality it is posturing.

Cnrl would need to make 25 billion profit this quarter to have their actual cash payable tax bill bump up that much haha!

Quite the joke really, cry and blame the government who gives them the cheapest royalties on the planet for their supposed lack of profitability.

[Kim473]

Wow. The losses for the 1/4 happened all in one month. LOL. Accountants manipulating the books is all it is. Save this artical for when oil goes back up and lets compare full 1/4's then.

Key wording in the artical is. “deferred income tax charge”

[79ford]

Originally Posted by rugatika

Unless you're one of the 100.

In reality these guys should be hacking and slashing the budget...there is an oil glut, producing more and more oil during oil gluts is bad for business. Too much oil is the main problem the industry is facing right now, adding to the problem probably doesnt help. Building more projects and creating more jobs trying to produce more oil to make the glut bigger isnt smart. In my opinion anyways

From a larger stand point cheap oil is good, keeps oil competive against encroaching technologies and people burn more oil when it is cheap in the long run maaayybe.

[hal53]

Originally Posted by 79ford

http://www.imperialoil.ca/canada-eng..._20150731.aspx


These so called tax bills are largely non cash write downs accounting for future years of potential earnings hits. Like imperial has done cnrl is just factoring the tax adjustment into the business in one quarter. The company, imperial has only paid an extra couple million in taxes. Cnrl's actual tax bill increase might be a couple million bucks aswell.

How a two percent tax increase amounts to 500 million is saying that they are factoring in 2% of a future 25 billion in profits or 6-25 years of operating. They are lumping it all into one quarter essentially.

To the average person it sounds alarming but in reality it is posturing.

Cnrl would need to make 25 billion profit this quarter to have their actual cash payable tax bill bump up that much haha!

Quite the joke really, cry and blame the government who gives them the cheapest royalties on the planet for their supposed lack of profitability.

I really wish that someday you would take sometime and do some research on royalties beyond your little oil sands world.....

[Okotokian]

There is some mighty creative accounting going on there.

[hal53]

Originally Posted by Okotokian

There is some mighty creative accounting going on there.

So a tax increase effective in the third quarter lowers the second quarter performance by 1.5 billion? Ha.

So they were on track to make a billion dollar profit, but the tax rate going 2% on that profit made it all disappear, plus another 400 million??????

That's the equivalent of saying I was making $150,000 a year, but they raised my tax rate 2% and now I have to sell my house and go on welfare.

maybe it's just a poorly written and explained article, but gee....

LOL...walk down the hall and ask your CFO to give you his take on it.....

[Okotokian]

Originally Posted by hal53

LOL...walk down the hall and ask your CFO to give you his take on it.....

LOL He's a creative guy too.

but legal. Don't want to give anyone the wrong impression! LOL

[hal53]

Originally Posted by Okotokian

LOL He's a creative guy too.

That is a necessary skill in that line of work....

[diamond k]

Originally Posted by Okotokian

There is some mighty creative accounting going on there.

Exactly

I will cry some more tears for the oil companies that are being asked to
Pay the same royalties as other provinces

Maybe CNRL would like to explain why they are hundreds of millions in arrears in paying back taxes and royalty payments. I know the govt sure does not wait for me to pay my taxes.

[hal53]

Originally Posted by diamond k

Exactly

I will cry some more tears for the oil companies that are being asked to
Pay the same royalties as other provinces

Maybe CNRL would like to explain why they are hundreds of millions in arrears in paying back taxes and royalty payments. I know the govt sure does not wait for me to pay my taxes.

Careful what you ask for...when oil was north of $100.00 a year ago, Sask. producers were paying half the royalties that Alberta producers were....

[79ford]

I would hazard a guess that oil plummeting 60% or so depending on the benchmark probably had more to do with their loss than some paper write down from a whopping 2% rise in taxes did

[rugatika]

Originally Posted by 79ford

I would hazard a guess that oil plummeting 60% or so depending on the benchmark probably had more to do with their loss than some paper write down from a whopping 2% rise in taxes did

I thought you said oil companies could still make money at these prices?

[omega50]

Originally Posted by 79ford

I would hazard a guess that oil plummeting 60% or so depending on the benchmark probably had more to do with their loss than some paper write down from a whopping 2% rise in taxes did

Why is math so hard?

[Dog hunter]

Put whatever twist on it you like but its like this- we are bent over and the ndp is bringing the lube. Thanks dippers!!

[HighRiver]

They couldn't buy an election so theyre mad that they have to pay taxes. CNRL Horizon is the most dangerous work site in North America. I hae been to sites in South America with better safety standards, so don't get too upset when this company cries.

[hal53]

Originally Posted by omega50

Why is math so hard?

Because 2 "percentage points", sounds a lot better than a 20% tax increase.....

[Sushi]

I thought CNRL's political jab was pathetic. They should be embarrassed for such low class. I know times are tough but how childish.

[JustMe]

Great to see some realistic opinions on here for a change, instead of the constant blaming the provincial NDP for the global downturn. Reaffirms my faith in the AO members.