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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Claude Cormier who wrote (9681)	3/5/2003 1:20:16 AM
From: Richard Saunders	Read Replies (3) of 24899

claude - same caveats. Not qualified to advise & there are many others who know the sector much better..... You asked an opinion. Personal thought is that there are quite a few interesting signs and signals flashing in and around the oilpatch. With Impact it appears -- based on some of the trading indications -- that they may have something with their Trutch play. That probably is a good thing seeing as some of the previous speculation re: reserves at the Laprise area in NE B.C. appears to have proved less than hoped. A news release put out a while ago by partner OLT Oiltec adds a bit more color. General opinion is that IEY would appear to offer a fair jag of risk -- all situations going for exploration wells are the same -- however there is the potential for decent reserve additions IF exploration efforts are successful. Keep in mind, & also speaking in generalities, that a often used rule of thumb is that chances of disapointment when drilling deeper exploration wells is probably between 7 and 9 times more common than success smiles......... high risk. Suspect you'll probably do o-k on paper in the immediate future with your new trust units. Will be interesting to see what that situation does and how they start to manage their gas production. I believe everything currently is unhedged so cashflow and distributions should be good. Might be worth watching to see what the co. is thinking and watch how they move including possible hedges and acquisitions over the next while. Did notice today that BTE Baytex closed their sale of some assets they picked up quite a while back from TPH Triumph and sold them to a trust, Shiningbank. Haven't looked too closely at all the details but at first glance it appeared price worked out for the gas weighted stuff to somewhere between $40,000 and $50,000 per daily flowing barrel of oil equivalent. If prices like those are the new norm there's not a whole lot of stumble room for any companies that are planning to grow by aquiring and optimizing. Suspect deals like that will be making the drillers happy as there would appear to be more and more incentive to try and grow via the drill bit rather than acquire. Notice also that trading volume in BTE Baytex has picked up over the recent while so maybe some folks are sensing that another new trust or possibly a merger will be coming before too long? One other thing re: IEY. Probably can argue it both ways but lots of shares o/s, somewhere around 70 million. Possibly good liquidity is one argument however dilution is the cost. Another thing to possibly keep an eye on? Quite a few companies did the financing thing, somewhere back in the archives I posted a list of 57 situations where financings had been noted. Quite a few of the placements had 4 month hold periods and for many we are approaching the end of those 4 month periods. Changing of the guard soon to take place?......... fundamentals for o&g, especially gas, do appear good but let the buyer beware. Lots of froth and some situations would appear to have had better success than others this winter. Stock picker's market and suspect quite a bit of the easy low fruit has already been plucked? Happy hunting.

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