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Buckee warns of Alberta cash cut

Talisman Energy's former boss Jim Buckee said today the company will likely cut about C$500 million (US$502 million) from its capital spending in Alberta if a panel's recommendations to boost royalties and taxes in the western Canadian province are adopted.

The Canadian independent expects to pay the province about C$400 million in royalties this year, invest about C$1.8 billion in the province, and pay C$500 million in operating, general and administrative costs, Buckee said in a letter to Alberta's Premier Ed Stelmach.

A government-appointed royalty review panel said Alberta's take from oil activity should rise by 20%, or about C$2 billion, a year.

Any spending cut would be on top of a C$500 million reduction next year, the letter said.

Early last month, Talisman said it may cut exploration and development spending in North America by as much as 32%, or C$700 million, to C$1.5 billion in 2008 as natural gas prices stay weak.

Buckee's comments join a chorus of protests on the report's recommendations.

Last week, Encana said it would cut its 2008 capital spending by $1 billion. Crescent Point Energy Trust said it plans to spend all of its C$150 million drilling budget in neighboring Saskatchewan in 2008.

"At current gas prices, I believe it will be difficult for anyone to grow their natural gas production in Alberta and if you implement these proposals we will see a significant loss of investment, jobs, taxes and the loss of world class technical expertise," Buckee said in the letter.

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