RE:RE:RE:RE:RE:RE:RE:RE:RE:News ReleaseEnviroment liabilities - for the overriding royalties there are no enviromental liabilities. They just get a portion of revenues but not costs. For the gas plant interests, the enviro liaiblities are less than for the wells and are distant as plants will operate as long as there is sufficient field production. I don't think this is an issue.
projectleopold wrote: so far they have not contributed any enviro liabilities, just to be clear correct?
I understand what you are saying. tourmaline is creating optionality that they can do Numerous things with, including moving liabilities. But I would consider that they do not want to do anything that would depress the valuation of topaz. because they want a high valuation so they can do deals.
my own feeling is that topaz will be used to acquire distressed assets that would not move the needle at tou. I don't see tou as a growth vehicle unless we get much higher energy prices. because it's so large it's harder to grow. The 5 year plan is simply milking the cash flows.
why topaz as the new focus? because they will have a clean balance sheet and a high valuation and a relatively low enterprise value. A great deal could have a magnifying effect at topaz. they should be able to do accretive deals. this is a master stroke brought about by the extreme pessimism in Canada. it could be an enourmous souce of future value for both sets of shareholders.
climbingbum wrote: I should have been more clear. I think this has to do with moving legacy assets off the balance sheet which have a higher legal and environmental cost as they get closer to the end of their useful life.
I think that TOU will focus on the growth side of the business and the other company will function more like the old style royality trust unit's. It is probably the way alot of companies should go as that trust sturcture is no longer an option.
later
cb