Thom Calandra = Pimp of the Year 2003
Another Mea Culpa awaits from this classic article.
China investing arm to back oil project
CITIC, Ivanhoe Energy expected to announce equity pact
By Thom Calandra, CBS.MarketWatch.com
Last Update: 1:08 AM ET Nov. 18, 2003
SAN FRANCISCO (CBS.MW) -- China's 25-year-old investment arm is expected Tuesday to unveil details of an approximately $20 million equity stake in a Canadian company's oil field exploration and development project.
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The China International Trust & Investment Corp., which controls more than $50 billion of assets spread across airlines, real estate, banks and insurers, is expected to announce the intended equity stake in Ivanhoe Energy (IVAN: news, chart, profile), whose China subsidiary is developing wells at the Dagang oil fields not far from Beijing.
CITIC, whose chairman, Wang Jun, reports to China's State Council, is expected to outline its cash injection into the subsidiary, Sunwing Energy, people close to the situation tell subscription service The Calandra Report.
The equity stake is subject to the approval of the State Council. Sources close to the company and to CITIC say there are no obstacles to approval. Representatives of Ivanhoe Energy on Monday declined to comment on the matter.
CITIC's newly created energy group is charged with taking equity stakes, or forming working partnerships with, oil exploration and production companies that could ease China's dependence on imported petroleum products. The nation was a net exporter of oil just four years ago and now imports about 1 million barrels a day.
Ivanhoe Energy already has spent $17 million mapping and developing part of a 22,000-acre block in the Dagang field, which is 125 miles southeast of Beijing. Ivanhoe's Sunwing unit, using an assembly of enhanced-oil-recovery techniques in the area, produces about 500 barrels a day from the field from five working wells, which fall under a production-sharing pact with China National Petroleum Corp.
The oil from Ivanhoe's current and future production at the Dagang field is sold to PetroChina, an independent oil company.
Bankers and others close to both Sunwing and CITIC say the $20 million or so in cash will represent an approximately 40 percent working interest in Ivanhoe's Dagang project and could lead to other development opportunities for parent Ivanhoe Energy, including efforts the company is undertaking to participate in the improvement of oil production in southern Iraq and a natural gas project in China's Sichuan Basin.
CITIC will be permitted to exchange its investment at Dagang for equity in Ivanhoe Energy (CA:IE: news, chart, profile) or a stake in Sunwing Energy for a period that likely will extend into 2005. People close to the situation say the Development Bank of China and other Beijing lenders are prepared to lend $40 million or more to Ivanhoe - in addition to CITIC's $20 million -- to accelerate development of as many as 115 new wells across the Dagang field.
Ivanhoe's portion of the oil field, by some estimates, has more than 50 million gross barrels of oil. Estimates thrown around on full-throttle production are for 14,000 barrels of oil a day sometime by 2005 or 2006.
CITIC also may unveil plans for a working interest or equity stake in an African oil-exploration project in the nation of Chad, sources say. The Chad project, linked to Canada's EnCana, is unrelated to Ivanhoe Energy, which specializes in the location and production of energy from so-called "stranded" fields, where the concept of profitable wells is challenged by remote locations and by rock, mud and tricky geologic formations.
CITIC's chairman, Wang, is expected to outline the pact with Ivanhoe Energy, whose shares trade on Nasdaq and in Canada and are a longstanding member of The Calandra Report Recommended List, a subscription service of CBS MarketWatch. The $20 million could be paid to Ivanhoe Energy as soon as December, sources said.
(Editor's note: Thom Calandra owns shares of Ivanhoe Energy, whose majority shareholder is mining executive Robert M. Friedland. Another Friedland company, copper and gold miner Ivanhoe Mines (HUGO: news, chart, profile) (CA:IVN: news, chart, profile), sponsored a recent Thom Calandra trip to Beijing and Mongolia.)
The Calandra Report will have more on the expected China pact, including interviews, in its next full edition - to be published Tuesday afternoon.
Thom Calandra's StockWatch is CBS MarketWatch's flagship column. The regular report is in its eighth year at CBS.MarketWatch.com. Thom Calandra is also author of subscription service The Calandra Report. Thom Calandra owns shares of Ivanhoe Energy
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On 11/19/04 Wednesday, Banister, whose charting work on several securities has earned him high marks with Calandra Report subscribers, said he was buying more shares of Ivanhoe Energy (IVAN: news, chart, profile) in its dip below $4.50. (The shares were originally recommended in The Calandra Report at 95 cents six months ago.) "This is a tad crazy... potential to $3.90 worst case.., then we would see a crazy rally toward $10.90 if we hit $3.90, or $11.50 or so if we hold the $4.50 area," Banister said.
On December 10, 2003
Thom Calandra is still a longstanding believer in shares of embattled natural gas and oil company Ivanhoe Energy (IVAN: news, chart, profile), see: The Calandra Report.
Summary.
11/17/03 IVAN closed at 6.35
11/18/03 The Pimp touts IVAN before the open.
01/14/04 IVAN Closed at 3.66
The Pimp lost 42.3% in 2 months!!!!!!!!!!!!
He should be fired from CBSmarketwatch. He is a disgrace.
Jack |
