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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (98427)	5/3/2001 2:11:02 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 436258

I am almost done scrubbing the Trusts. Big differences I saw between HGT and BPT were... Different tax breaks. HGT is mostly alternative fuels credit, BPT is depletion deduction. With the depletion tax deduction, you are supposed to subtract that saving from the cost basis of the trust. I haven't finished the research on the alternative fuel tax break yet to see if it is the same. HGT is mostly Natural gas with a very small amount of oil as a by product. BPT is mostly oil with gas as the sideline. HGT owns the whole field and has all rights to it. What they find, they keep. BPT shares rights with other firms and is 3rd wipe in line percentage wise. They keep the oil and only vaporous gas in the cap. Any other gas (ie: liquid) is not theirs to keep the way I read it. Cost deduction per barrel for computing profits seems a bit higher on BPT. it is a sliding scale prefigured but reliant on the CPI and some other things. This year, break even cost is 10.75 increasing to 11.25 next year and so on. Maybe BPT is just being more honest but they seem to have more escape clauses than an IBM financial statement. -ggg- Basically it says they can take on debt via paper, mortgages etc. I don't recall seeing that in the case of HGT. I guess you see where I am leaning with this. The main benefit of BPT over HGT is if you think NG is going to weaken substantially over the summer versus oil. BPT could be a bit more stable in payout than HGT if NG prices drop. I was given a link via PM to a NG chart showing the cycles over the last 5 years. You can set your watch to it. Storage bottoms in April and then climbs until November. I also read an article that confused me a bit. Storage levels are slightly below the prior 3 years according to the Fed's site yet I read somewhere else that line pressure was at an extremely high level implying that there was a large store of NG within the lines themselves which often act as temporary storage. Normal pressure readings are generally in the mid 20s sometimes getting up to 29. The readings a couple weeks ago were at 34. Still I will likely start dipping in HGT soon if they pullback much more. I am going to stay away from stock options from now on. Was short MMM above 118 1/2 and the put was selling for less this morning than then despite the underlying being down 3 points. Someone gave the pit guys a script to make sure they knew they were going to use this one to prop the DOW. Stupid thing rallied back 2 points and is now pushing it's highs for the day. I am sticking with common from now on. Good Luck, Lee