Big Banc Split Corp T.BNK

profit tax

[grantoue]

canada charges a 14% profit tax. the albanian government really is out of touch with reality.

[braincloud]

Again, you only give enough information to be dangerous. The profit tax is actually 15% but there are many elements to taxing the O&G industry here in Canada. First is the royalty. The royalty tax varies depending on viscosity, depth and the age of the well and royalty tax can be anywhere from 0-40% for wells that produce more than 118 bbls/day. The second difference is in the eligible

[braincloud]

Grantoue, would you be so kind as to explian your comment in how the Albanians are "out of touch with reality"? I'd very much like to see the comparisons you can draw between the North American oil and gas tax regime to that in Albania? Can you do that for us? I'm just curious if you are up for that challenge.

[grantoue]

Well for one thing I was wrong. I never included provincial taxes which would add another 14% . We are still way under 50%. Am I wrong?.

[braincloud]

You haven't commented on how Exploration and development costs compare versus Albania. You will find that there are some major differences. Even the royalty stream is far more onerous in Canada in certain circumstances versus Albania.  I  would just like for you to substantiate your comments is all. If you'd rather not, no problem. heck, maybe I'm wrong and have this whole

[grantoue]

Federal corporate tax is 14% and alberta provincial  corporate tax has just been lifted to 14% if you add the two that equals 28%. If I am not wrong pretty much any expence incurred in running the company is deductable. GST is charged on profit as well this would now come too 33%.I do not know the ideo cincrocies of the royalties charged by either Government, If you know these numbers please

[braincloud]

Thanks for that. I know a little about the royalty stream, enough to be dangerous. But I do know that there are factors like viscocity, age of well and depth and the flow must be over 115 ( about )bbls per day and the royalty varies from zero to 40%. 

[grantoue]

So in comparison which Government offers the best terms.?.

[braincloud]

I think Albania does at least from certain perspectives. Maybe not after adjusting for risk. ( It's Albania we are talkimg about not Fort McMurray ) One has to consider the available talent pool and the type of oil and of course I'm not sure how the remediation was treated. As and aside, Not sure if you've ever been there and seen the BEFORE and AFTER. It was horrific what was there

[grantoue]

Thank You; I learned a lot . Do you Know how much is in the cost recovery pool?.

[braincloud]

N.P. They are debating the 2011 taxation year where the CAPEX was $253 million ( cost recovery pool. includes CAPEX and certain OPEX as defined in the Contract.  The IMF web site has some interesting sheit on Albania and if you google Petroleum Agreements in Albania you will find this agreement and others. Its facinating stuff. Of course I have to do more D.D because I have a sheit load of

[grantoue]

if you want to see a mess look at  pacific exploration. they are on the verge of bankruptsy. This game is not a joke it is serious stuff. I have too say I am getting sick of it. Hahahaha

[braincloud]

No sheit. $5 billion in debt is a quick lesson on what not to do when oil prices are falling. This one is eff'd for sure.

[wallop13]

What the Albanian government doesn't understand is that right now Bankers needs about $50 (100 million ish capex) brent just to maintain production. Bankers will now need to prove they can grow at a decent rate with these new taxes/tax rules (given that we may be sub $60 brent for at least a couple years). Based on what the gov thinks is their fair share for 2011, this could be a

[braincloud]

Wallop, I don't think you understand what's what man. You have this fixation on some new tax rules that will impact immediate earnings. IMO it isn't. There have been discussions about the CAPEX and OPEX and what they paid, what it worth, is it too much, where did it get spent, is it allowed etc etc. How you arrive at the conclusion "this could be a substantial future tax increase

[good40]

Take your head out of the sand braincloud. It is obvious that the government wants profit tax from 2011 forward. The article states that they have collected no profit tax and that they intend to change that. As I see it, BNK has agreed to pay $57 million by the end of this year, regardless of what it is allocated towards. Future tax or past tax from 2011 and beyond. The government also wants to

[braincloud]

You obviously have your perspective albeit a wrong one. If what you say is correct then you should short the stock. One of us has grossly misinterpreted the "article". * they reached a compromise to advance $57 mill NOT they agreed to pay * They want to re-negotiate the elements of the Cost Recovery expenses. Cap it?, re-define it? re-define the elements that qualify ? * they haven't

[good40]

My contention braincloud, is that BNK will pay $57 million in 2016, regardless of what it is allocated towards. Only my opinion,  I just don't think the government will accept any other result. If that is the case, then 2017 will be a much better opportunity for investor support. 

[braincloud]

Ya right, Whatever. I don't want or need to persuade you and I'm growing weary. I give up You're right, they will pay $57 million plus 11% Royalty plus their capex plus re-negotiate the Petroleum Contract. DO I have that just about Right? I've put my hand up to participate in the new issue coming cuz they gonna need to raise money if you are correct. I think the ALBS will privatize

[good40]

No doubt you're weary, you're here every day. For a guy who doesn't care, you sure spend a lot time with it. For the most part, all I do is in response to what you write. In no way do I consider BNK in the same plight as PMI. I just believe that there will be a better opportunity for investors in 2017... for all the reasons discussed here. If I'm wrong, then I'm wrong. Nothing

[braincloud]

I don't care what YOU think ...anymore. You think what you like. Put me on ignore and we can stop talking. I'll be one step ahead.

[good40]

Your information is the least accurate and you post more than any other. I only ignore spammers and those who aren't capable of debate. You're capable... you're just wrong.

[wallop13]

I'm talking about the future tax liability, not immediate earnings. I also think the issue is a bit deeper here. They are not happy that they have not collected any of the 50% profit tax. This might not have any effect on the past, but it sure as hell will have an effect on the future.

[braincloud]

Perhaps it will. I suspect it will just impact deductions. hey suit yourself with your interpretations. I'd suggest that you call the company and have the issue explained to you. I tired of doing O.P Due Diligence. Fk, just sell the stock and move on.

[wallop13]

Less deductions = more tax. My concern is this. Say for example we can now grow at $60 brent, will we now need say $65 for that same growth? It's not huge, but in this market it makes a difference.

[braincloud]

Nah, not really. Please do yourself a favor and read up on the expense pool. Hey if they have a cost pool of $253 million and the ALBS decide to disallow $5 million of that pool and the pool now is lower, the impact of the lower pool is so small it's hardly worth mentioning. It just means that they might be in a taxable position earlier. The pool carries over to next years. I mean, describe to

[braincloud]

The royalty tax varies depending on viscosity, depth and the age of the well and royalty tax can be anywhere from 0-40% for wells that produce more than 118 bbls/day. The second difference is in the eligible deductions. CDE ( Development expense) is deductible at 30% per year, CEE Exploration expence is 100% ( discretionarily ) and COGPE O&G property expence is 10% per year In Albania, they