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Strategies & Market Trends : Winter in the Great White North -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (1384)	9/6/2001 12:57:54 PM
From: russet	Read Replies (1) \| Respond to of 8273

Prices at Alberta hub were Canadian $1.50 per mmcf last week and have had dips to $1.10. PEY is 97% natural gas. Peyto produced some 2,000 boe/day in the quarter ended June 30th, 2001 (up 136% year-on-year). The company is currently producing at rates of 3,000 boe/day and we expect this to climb to perhaps 5,000 boe/day by year-end. This growth should more than offset the current decline in gas prices. Revenues for the first 6 months of the year were C$26.3 million, up from $4.5 million in the corresponding period of 2000. This helped net earnings surge to C$9 million from C$1.25 million. This translates to earnings of C$0.21/share and cash flow of C$0.43/share for the first 6 months of the year. Even allowing for lower realized gas prices in the second half of 2001, growth from new production should mean that Peyto is trading at less than 8 times our estimate of expected earnings for 2001 and less than 5 times our expected cash flow. Hamster calculations: $1.50 per mcf * 5000 boe * 6 mcf/boe * 182 days = $8.19 million Canadian for six months,....less than the $26 million first half revenues. It has become a play on the gas price,...better hope for a very cold winter:-((( Oily stocks may be better but be warned, Opec exceeded their cartel quotas by producing 4 million more barrels per day in August than they agreed too. Price of oil?? Source: CALGARY, Alberta, Sept 4 (Reuters) Spot natural gas prices crumbled across much of Canada, with weak demand and abundant supplies pounding the key Alberta market down to its lowest level in nearly three years. Gas at the important AECO storage hub in Alberta plummeted about C$1.10 and was quoted at C$1.60-C$1.65 per gigajoule. It was the lowest daily average at the hub since early December 1998. Reduced demand following the Labor Day long weekend and additional supply weighed heavily on the major provincial trading center. "There was way too much gas and no where to put it," said one trader in explaining the plunge, which saw session lows hover just above C$1.10 per gigajoule. He said the situation was exacerbated by the return of gas production curtailed last week because of a fire last week at a natural gas liquids processing plant in Fort Saskatchewan, Alberta. Sources estimated the accident temporarily shut in between 300 and 400 million cubic feet per day. Traders also reported lower prices at other Canadian export points, with most players linking the weakness to mild U.S. weather, a lackluster economy and expectations of another week of large storage injections. "It's tough to find a buyer," commented one source. "There is no demand and all the production is up. We have no room to put the gas right now because injection facilities are running at maximum." Gas at Huntingdon/Sumas on the British Columbia-Washington state border fell 30 cents to $1.60-1.65 per million British thermal units (mmBtu). Deliveries at Niagara in southern Ontario dropped 1 cent to average $2.28-2.33 per mmBtu. The October contract at Henry Hub, the NYMEX delivery point in Louisiana, slipped 2 cents to $2.355 per mmBtu. Traders told Reuters that firm physical prices limited paper losses. Environment Canada predicted temperatures in Toronto would climb up to 9 degrees F above normal later this week, reaching into the low-80s F Thursday and Friday. The federal forecaster said the weather in southern Alberta would peak at 73 degrees F Thursday before sliding to around 65 degrees F Friday and Saturday. AECO forwards: 09/04/01 Previous bal month C$2.40-2.45 NA Oct C$2.75-2.80 C$2.97-3.02 1 Year (Nov-Oct) C$3.80-3.85 C$3.90-3.95 ($1=$1.55 Canadian)