Oil sands stocks skid after Alberta royalty report

By Jeffrey Jones

CALGARY, Alberta, Sept 19 (Reuters) - Shares in Canadian oil sands developers skidded on Wednesday as investors weighed the possible impact of a top-level Alberta report recommending the industry fork over higher royalties and taxes.

An expert panel appointed by Conservative Premier Ed Stelmach has urged the government to change the fiscal regime, arguing residents are not getting their fair share from booming energy activity, including oil sands development.

The panel's report recommended higher royalties for oil sands projects once their development costs are paid out, as well as a new tax on oil sands production that is based on benchmark oil prices.

The report also urged such changes as a cut in royalties for low-productivity conventional oil and gas wells and an increase for more prolific ones.

"But it's the oil sands guys that are feeling the brunt of the impact," said Jill Angevine, an analyst at FirstEnergy Capital Corp.

Angevine estimated the changes to the royalty structure could cut oil sands projects' net present value by 7 percent to 10 percent.

Among big oil sands developers listed on the Toronto Stock Exchange, shares in Canadian Natural Resources Ltd (CNQ.TO) fell more than 4 percent to C$76.24, Nexen Inc (NXY.TO) slid 2 percent to C$30.74 and Suncor Energy Inc (SU.TO) dropped nearly 4 percent to C$97.29.

Small players were hit harder. Synenco Energy Inc SYN.TO skidded 13 percent to C$11 and UTS Energy Corp (UTS.TO) sank nearly 8 percent to C$5.72.