RE:RE:Q1/2023 COP CC Second Question by Neil Mehta On SurmontI appreciate teh math z173.
Maybe I'm missing something when it comes to tax loss carry forwards. Not in the numbers themselves, but rather in the fact that there are huge losses in the first place.
When Suncor bought Teck's share of Fort Hills, Suncor took a big writedown. When the transaction took place, accounting practices dictated that the entire asset value of the project had to be re-evaluated at the most current transaction price. The price paid was a heck of a lot lower than the sunk costs of putting Fort Hills together.
To me, the real question is WHY were the tar sand assets worth so much less today than they were when they were built in the first place. Maybe it is related to why virtually every international oil company is pulling out of Alberta, or why institutions have been and will likely continue to sell their position in Suncor.
I expect that all three companies, Suncor, Total, and COP have bright guys with calculators. They would 100% be able to figure out the value of the tax loss carry forwards and every other detail.
Once the number crunchers were finished their work, the numbers would be presented to the brass and likely to the BoD. At that point, each management team would evaluate whether the $4 billion fits their master plan. As such, the tax loss carry forward gets reduced to a number that may or may not be significant.