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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: xxreno who wrote (71873)9/26/2006 8:29:38 AM
From: Ed Ajootian   of 206270
 
xxreno, Great call on WARR! I fully admit, I've lost my guts, I guess natty prices at a 3 year low can do that. Not sure what you meant by "earnings are only dependent on NG prices at the margin". I believe these production/workover companies are at significant risk in the current environment, and had been slowly taking down my position in Basic Energy Services (BAS) in addition to WARR.

I can tell you one division of WARR's that will be going like gangbusters over the next few months -- Plugging & Abandonment ("P&A")! With natty prices being as high as they've been for the last 3 years, there have been tons of stripper wells that have just been left producing since their revenues have still exceeded the costs of producing the well. But with $5 natty prices, many of these wells will now go into a negative cash flow situation.
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