MGM Energy Corp MGMCF

Improving Regulatory System

[OilEng]

Much has been written and said about the crazy regulatory system in the NWT.  The latest NEB security deposit and financial guarantees is but the latest.  (I think these will be modified for the Norman Wells area).   In order to gain a balanced perspective we also need to look at the positive developments of which there are many.   (see below)

While some are critical of the extensive public consulation required in the NWT BEFORE an application is submitted,  I think that this may be a better way of doing things than what we do in the south.  In the south, the firms make the application and THEN there is serious public consultation.  Having participated in some of them, they often look like a railroad job in which the public is consulated and then ignored.  The results is a regulatory license but no SOCIAL license.  A good example of this is the Northern Gateway and Keystone XL projects.

In short, I think there are major problems in the North, but I think they can be fixed.  (The Regulatory environment is but one problem) The market disagrees and that is why the stock is so very cheaply priced.  In order to fairly value the stock one needs a balanced persective accounding for the negative and positve developments. 

Here are more recent positive developments:

April 2014  - the NWT will take over the resource development area.  It is not clear how all this will work out, but I think the NWT government has signalled that they want a regulatory system for oil and gas which is more like the south while dealing with the need for extensive consulattion with native groups are required under legislation and treaty. 

August 8, 2013 - Sahtu Land Use plan approved after 15 years of discussion.  This is effectively a land zoning document which reconizes that the zones the land under the Canol for resource development.  Areas just to the North of the Shell and MGM lands bought in 2012 are zoned conservation which explains why those lands were not posted.