The world is not quite unfolding the way Greg Noval might like.
TSX Group, which owns and operates Canada’s two national stock exchanges, is reviewing whether Canadian Superior Energy, Noval’s creation, meets listing requirements on the Toronto Stock Exchange.
Perhaps influenced by that development, investors supported only C$3.4 million of a hoped-for C$15 million private placement of shares in December after the issue price was dropped to C$2.50 per share from C$3.
The money is destined to fund exploration drilling in Western Canada.
Meanwhile, the Calgary-based junior company, which produces less than 3,000 barrels of oil equivalent per day, is gearing up to drill again offshore Nova Scotia this spring and offshore Trinidad about mid-2005.
TSX did not say why it is reviewing Canadian Superior, but sources believe the probe is related to the timeliness of Canadian Superior’s disclosure of information.
But the announcement startled underwriters of the financing deal, who declared they have no worries about Canadian Superior’s disclosure practices or its assets and believe its prospects are solid.
Canadian Superior is also listed on the American Stock Exchange.
Greg Noval, the usually outspoken chief executive officer of the company, had no comment on the review.
His only recent statement, made when third-quarter results were announced Nov. 16, was an expression of confidence that “we will achieve several home runs for our shareholders in the future and beyond.”
Flags down, swimsuits off in royalty feud
The Canadian flags are down and Maple Leaf swimsuits are off the shelves in a raucous dispute over offshore oil royalties in Atlantic Canada.
Newfoundland was the last of 10 provinces to join the Canadian confederation and, the way things are developing, it might well be the first to leave.
Across the rocky, windswept island off Canada’s East Coast, the Canadian flag has been removed from provincial government buildings on the orders of Premier Danny Williams.
Feelings between Newfoundland and the Canadian government are so bad that a Newfoundland sportswear company has even withdrawn a line of swimwear that resembles the Canadian flag.
“They’re slapping us in the face. I’m not willing to fly that flag any more in the province,” said the short-fused Williams.
Prime Minister Paul Martin said he was disappointed by Williams’ actions and argued Canadian symbols should not be used as political props.
The kerfuffle is all over Newfoundland’s argument that it should collect 100 percent of royalties from its offshore oil production. Nova Scotia wants the same deal from its offshore natural gas.
The sticking point is Williams’ demand that the offshore revenues, projected to total billions of dollars, should be paid without any impact on federal equalization payments made to Canada’s economically weaker provinces.
To date, the region is producing oil from the Hibernia and Terra Nova fields, White Rose is due to start operations within a year, Hebron-Ben Nevis is stirring back to life and over the long-term the Laurentian sub-basin and Orphan Basin could be developed.
Williams estimates that White Rose alone, under the current fiscal arrangement, could pump C$2.2 billion into federal coffers over its lifespan, while Newfoundland would collect little more than C$200 million.
Federal officials have said their government is willing to end its practice of clawing back about 70 percent of oil and gas royalties by reducing the equalization payments made to the province.
Williams says the attached conditions are unacceptable and would cost Newfoundland C$1 billion in projected offshore revenues over the first eight years of the deal.
He was so incensed that he stormed out of talks aimed at reaching an agreement and vowed that he would never again sit down with the Canadian government on the issue.
Federal Finance Minister Ralph Goodale said that, despite the “very harsh” comments by Williams, his government will pursue a “constructive dialogue” with Nova Scotia as proof that it is working in good faith.
Nova Scotia Premier John Hamm has been less vocal than Williams and has agreed to further discussions.
