drilling results....good or bad, page-38

Thanks HT for your work.

So the impact of the new Tax is bad for OZL SH because:
1. It will reduce profits from PH. Reducing NPV and potential dividends and therefore SP.
2. It will delay the erosion of the tax credits, thereby probably delaying the paying of fully franked dividends thereby reducing SP.
3. It will encourage OZL to look offshore thereby [otentially increasing sovereign risk.
4. It may reduce the ability to attract capital for projects (some may see this as a bad thing)
5. It may lead OZL to operate its plant and machinery less efficiently as HT alluded to earlier ie not 24 hr round the clock.. Is that what we really wnt both economically and environmentally

On the positive side
1. It may well be that the new tax and the subsequent lower share prices will provide OZL with opportunities to buy.
2. Swan and Gdaf may be right that it is needed to pay off the debt. Whether the debt had to be as large as it is, is now largely a moot point although some savings could still be made.
3. It may well be more socially desirable to share the wealth around to all Australians although the reward to ShareHolders for taking the risk to invest seems to be ignored in this argument. (What is the impact on Super plans?)

From my pint of viewm the way the tax has been implemented has been terrible. To introduce the tax so suddenly and so large for I believe mainly political reasons, puts Australa into a sovereign risk category for overseas investors. THis is not desirable and the Gov could have introduced this more gradually. It is also retrospective in nature, which should be addressed.

Gdaf, I have worked in Treasury. The decision makers there are normally bullly boys who generally do not think of the social good when making decisions. They generally have one track minds that seek to increase the take more than cut spending. If you think about it carefully you will see that this is in their own personal interests to do this.

In summary, I can see both sides of the argument even though I am hurting from SP depreciation. Swan and co however deserve a quick kick up the backside for how they are implementing this without thinking it through.

Regards