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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (10122)	1/31/2004 10:28:16 AM
From: Kerm Yerman	Respond to of 24927

Retired / O&G Index I'm a firm believer in the timing behind investment into the oil and gas industry. I believe the key period behind share appreciation is the 6-month period beginning October and ending March. At this point in time, we are 2/3 through that period and we may have seen the peak in the index before this current slide. I wouldn't play the producers index at this point in time. One reason is the current scenario among the most major E&P companies and integrated oil companies that comprise a large percentage of this index. Investors and analysts alike have to be concerned with the reporting thus far from these companies - especially the analysts who got caught with their britches down this time around. Only Suncor has been a bright spot thus far. A few years ago, I was quick to point out that the upside among the larger companies in Canada would be only via activity in the international arena. At the time, only Talisman Energy had that vision and the old Canadian Occidental outfit to a lesser degree. I hit the subject hard at the time and I might add that I was the only one doing that at the time. Here we are three to four years down the road and now it is becoming very clear that my comments were right on. Petro-Canada is now the brightest example of this opinion as they have publicly stated. Besides patting myself on the back, what I'm really getting at is this - I don't anticipate any further giant leaps in the index until all the larger companies begin to increase operations on an international basis. The impact of such activity won't be witnessed for another 3-5 years down the road. What we have seen thus far, is an increased index basically built upon the pricing scenario related to oil and gas prices. From this point forward - what we must see are the results in the form of production and reserves. Case in mind. Look at Penn West Petroleum, a company I really have liked over the years. A great story up to this point in time. Is converting the operations into an energy trust their answer for continued success and reward to shareholders. Maybe the later, but certainly - that is where the real growth ends. If the company is hungry enough, there is only one direction to go over the near term future - international. A company of this size should be able to make a few junior oil type acquisitions, maintaining their key experienced personnel, and gain a strong foothold almost immediately on the international scene. An alternative route is to joint venture with larger and proven performing companies in the international arena. Either way, I know that would turn me on. It would also help turn the index on also.