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

To: marcos who wrote (1598)	11/4/2001 3:50:46 PM
From: teevee	Respond to of 8273

marcos, in the meantime, what do you like in the patch besides pey? .... Obviously, I like SHC, not only for its production profile and exploration exposure in the Sable Island gas fields, with gas sales into the New York area market, but its growth profile with the Muskeg oil sands mine. SHC has already talked about expanding from the initial 150,000 barrels/day to 450,000 b/d. For a company of that size to have a growth profile where the company will double in size in the next 12 months, and have prospects to more than double in size again has made SHC a core holding ( I do have a trading position too as SHC has tradable price swings given its low float and high percentage of institutional holdings of that small float-Royal Dutch Shell owns about 80% of the shares).... For a penny level oil and gas spec, where a successful group, whose previous company was taken over, has decided to "do it again", I have posted on RLN and the new management there-the old Grad and Walker team (less Walker). fin-info.com Production growth is relatively easy starting from zero so I expect dramatic growth over the next two to three years for RLN, and with commensurate share price performance. As for PEY, they have the lowest finding costs, lowest production costs and highest net backs in the entire industry. peyto.com Production growth is a key factor here as well. I believe they will quickly grow from about 5000 boe/day to 9-10,000 boe/day within the next 12 months. That would translate into a shot at $10-$12/share. Also, a very significant factor that the market has not yet apparently priced into PEY, is the quality of their proven producing reserves. The life of these reserves has increased to over 15 years. The norm in the industry is 5 to 8 years. Surely proven producing reserves with a 15 year life are worth more that reserves with a 5-8 years life span? IMO, with interest rates as low as they are now, even with a conservative discount rate, PEY should be at least $6.00/share today. There are many other companies of merit out there, but I have placed my senior, intermediate and junior oil and gas bets as above. I did so because I believe each will deliver the best results within their respective group.

To: marcos who wrote (1598)	11/4/2001 4:32:05 PM
From: russet	Respond to of 8273

Oil/gas: slowly backing into gassy oil and gas trusts that look undervalued on a book, cashflow per share and profit per share basis. Favorite is PWI.un, about 55-60% gas....got sold down heavily a few months ago after buying Cypress, but they got a pretty good deal considering what Mericans are prepared to pay for Canadian gas lately. PWI just did a bought share issue with the big brokerages to pay down debt,...these share issues serve to depress the price in the short term because the price is usually below current market(because they are bought deals), and the brokerages sell off their allotments quickly which tends to keep a cap on shareprice temporarily. Most of these trusts are paying substantial monthly dividends, in the 20-26% per year range so they pay you to hold. PWI.un has significant hedges on 75% of their production at much higher than current prices for more than a year, so their distribution of .17 per share per month shouldn't take too bad a hit if oil and/or gas prices drop. I tend to look at the opposite side of the price story,...record gas wells were drilled in shallow fields this past summer that caused a temporary spike in supply and a glut in stored gas, but now drilling is subsiding quickly and the producers are capping higher cost wells waiting for higher prices which will serve to lower future production, but demand continues to increase year after year. On the oil side, I assume the U.S. lead fatwah against the moslem backed terrorist fatwah against us infidels in a bid to gain power in their home countries will heat up considerably over time which should light a fire under oil prices. There are more than twenty of these trusts, other examples are AET.un, AVN.un, ERF.un, SHN.un, NCF.un,....it may be prudent to wait for them to release third quarter earnings over the next few weeks and assess each on its latest figures paying particular attention to the hedges in place, the percent oil to gas production and reserves, costs to produce, production increases and decreases, profit per share etc. The latest figures will show the weaker sisters as gas and oil prices were much lower than in the second quarter, but colder weather ahead should provide some support for the next 6 months. If the above holds true, I may get to warm the seats first in that papaya grove, if the rest of the world co-operates (ggggggggggggg).