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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: GaAs52 who wrote (12187)8/15/2002 6:50:44 AM
From: quehubo  Read Replies (1) of 206207
 
For 2003 most of the service companies are trading at 19 X FEPS and most of the drillers are trading at 17 X FEPS.

Statistically they trade 10-30 times 12 month FEPS. With the higher multiples when earnings are lowest like today.

Lehman has some interesting observations about EIA's STEO this month. EIA has been increasing electric demand required by NG fired generators and reducing hydro and coal output.

Do you see why electric prices are not booming to previous levels this year in most markets even with record electric sales? These are all the new units burning NG. Did you see what happened in NYC. NG was selling for $4.5 yesterday at the NYC gate, to provide fuel for generators.

Price sensitive to demand has been shattered for the most part. I am sure some other industries will move offshore sooner or later as well. But for power generation and space heating this is no other viable choice.

Dont confuse your recent luck, with weak arguments that OSX companies have no earnings and energy costs are too high for the economy to recover. If your bet was that the economy would stall, then you made a good call. If you bet the corporate corruption revelations would tank the markets further you made a good call.

But if your argument is that E&P's wont have to spend increasing very large amounts of money to maintain and or improve production than you are wrong. The NG 18 month forward futures strip tells the story.
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