[Note: Some people may not have noticed but if you press the play button on the slide display with this post, there is an audio file giving a explanation of the slides. ]
Here's a rough assessment comparing the royalty from Hebron using the provincial generic royalty regime and the basic royalty announced by the provincial government on August 22, 2007.
The main implication of the assessment is the need for more information being made available in the public domain on the overall agreement.
The major caveat is a warning against concluding the deal is good or bad based solely on the information in the public domain so far or on this assessment. As with Voisey's Bay, it is easy to come to snap judgments only to later acknowledge the deal was good.
There may well be errors and omissions in this assessment. It is rough and was intended to be a first-look overview to see what, if any, points came into view for further discussion and inquiry.
The slidecast runs abouts 22 minutes, with narration synced with the slides. You can still skip ahead to specific slides. Note: There is an error in the slide representing the third scenario. There should be two years at the lowest royalty level and four at the top end. this doesn't materially alter the overall picture which should focus on the impact of an increasing share versus a constant share, in an assumed constant price scenario.
For some of the background used in developing this assessment, use the following links;
1. Sproule Associates: price forecasts.
2. Government news release announcing the memorandum of understanding.
3. Canada-Newfoundland and Labrador Offshore Petroleum Board, for resource estimates.
4. Hebron field characteristics.
Original slides without audio: