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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (4784)	5/21/2001 7:33:49 AM
From: chowder	Read Replies (1) \| Respond to of 23153

Jim, thanks for all of the work you've done on KWK. I must admit, it opened my eyes. I suspect we'll have several shorting opportunities on this next leg up, assuming it continues. Oil is still rising, natural gas is down slightly in overnight futures and gold is up significantly in overnight futures, up over $3 an ounce. It'll be interesting to see this week's reaction to the inventory reports. Will we see weakness in the E&P's? Will we see analysts starting to downgrade some of the energy stocks due to higher valuations? In the coming weeks, how will energy stocks compare with their comparative quarterly earnings? Will we see an increase in production? Are there any further mergers coming? Lots of questions to which we'll soon have some answers. I already have a small short position in KWK. I may be a little soon, but based on the work you've done, if natural gas prices come down, KWK looks like it may come down harder. Thanks for your efforts. dabum

To: jim_p who wrote (4784)	5/21/2001 12:20:34 PM
From: CpsOmis	Read Replies (1) \| Respond to of 23153

Hi all... Regarding the PEX/SMOP merger, I made a couple of calls this morning. I spoke with one of the accountants at SMOP. He was careful to state that the information he was giving me was inconclusive, etc, but this was his best information. A few relevant points: 1) Regarding the taxable nature of taking PEX stock as an exchange, there are still some unknowns. The minimum 3 million PEX shares in the exchange has to do with this. At a level slightly below this, he wasn't sure, the exchanged stock MAY BE taxable. 2) Regarding how many people have elected to take PEX in the exchange, the exchange company would not tell me, and no one at SMOP could give me the info either. I did get a couple of pieces of info, however. a) One, (ONLY MY OPINION) based on my conversation, it seemed as if their was some concern that the minimum 3 million share election has not yet nor will be reached. b) Though the deal COULD be called off in the event the 3 million election is not reached, it was highly unlikely, in the opinion of the man I spoke with. c) He told me there had been a snafu in the dissemination of information from brokers to clients about the rights to take PEX stock vs. the cash buyout, and SMOP/PEX MAY consider an extension of the election period past the current cut-off date of this Friday, May 25. 3) The current arbitrage between the cash sell price of SMOP in the merger (4.71) and the current sell price of PEX (10.7) is .33, or about 7%. (.471*10.7)-4.71 I think that a 7% arbitrage is not bad, and that long term PEX should do ok, so I will be trading some of my taxable account shares to PEX, at least until my long-term capital gains kick in. (hoping that it will be a tax-free exchange) I am concerned a bit about the liquidity issues as are others here, but their balance sheet does look good, and the 7% arbitrage plus an additional 12% in tax reduction looks good for a short term hold. On top of that, oil/NG will still continue to be hot for the next year or so. My .02 worth....... Anyone else here still have a position, or am I talking to myself? Regards, Cosmo

To: jim_p who wrote (4784)	5/21/2001 4:38:39 PM
From: Telemarker	Respond to of 23153

WRT KWK short: Going from memory, I think that much of the production, hedges and debt came in the same transaction - a 2000 purchase of Michigan properties. My recollection also is that the deal was then priced and financed so to be highly accretive at that time. Hence, I question your assertion that KWK may not be viable in a lower natgas pricing environment. Also, what do you know about the PanCanadian JV? I noticed that to be absent from your analysis it that may well be what's driving the KWK shareprice above what a "rearview mirror" analysis would indicate as reasonable. I sold the remainder of my KWK just shy of $16, and am somewhat surprised to see this robust rally continue. Yet, while there may be some E&Ps that I'd think about shorting (haven't done any shorting here yet), KWK is not one of them. In fact, given the ongoing monetary blowout I don't it is prudent to be shorting anything. FWIW, sold 2/3 of my PM shares this morning. Regards, T