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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (30383)	2/28/2004 10:42:18 AM
From: Aggie	Read Replies (1) \| Respond to of 206089

Hi jim_p, Still in the Caribbean, more work than I can handle and spending more time in HouTex than I prefer. Things are extremely busy around here. All of the operators are having difficulty producing enough gas. There is very little spare production. Our industry has moved from having operational people dominating senior management (pre-80's - the "sensible" era), to having bean-counters dominating senior management (80's-90's - "the spending controls" era), to having finance people dominating senior management (90's-now - the "satisfy the street" era). The net effect is that understanding of the planning and implementation cycles is at an all time low - the current regimes don't get it, and their predecessors didn't either, so they couldn't pass it on. No one understands the distinction between cost and value, between time-value-of-money and time-value-of-planning. -Sigh- I think I'll go sit by the pool and despair over my condition with a cold one. Regards to all, Aggie

To: jim_p who wrote (30383)	2/28/2004 8:29:37 PM
From: Bruce L	Read Replies (2) \| Respond to of 206089

Archie MacAllister comments on El Paso in Barron's: In this year's session, he was bullish on eight stocks, most of which are currently higher. But just to prove Archie's only human, El Paso, trading at $8.25 when he said nice things about it, not the least of which was that it could be a $12-$14 number, after moving up a buck or so on the plug, a fortnight or so ago, alas, took gas. Last we looked, it had recovered some, to 7 and change. No mystery why the stock got hit: the company announced it had slashed estimated reserves by 41%. That kind of agonizing -- especially for shareholders -- readjustment is becoming a clear and present danger in the energy business, where traditionally reserves have been labeled "proved" or "probable" (in the oil patch, you better smile, pardner, if you say "unproved"). Royal Dutch/Shell, you may recall, did something very similar back in January and that drew the SEC's attention (El Paso, nicely preemptive, sent off the particulars of the change to the agency unbidden). The downward revision -- plus, we should note, a pretax charge of $1 billion to account for it -- met with a predictably cool reaction on the part of analysts, who hadn't exactly been in love with the stock anyway (no doubt they were still smarting from touting El Paso at over 70 back in '01 and watching it slide all the way to 4 last year; that sort of thing does tend to make you testy). In any case, and only partly out of sadistic impulse, we buzzed Archie last week to get his post-revision take on the stock. Blindsided like everyone else by the whack out of reserves, he still thinks El Paso's a buy (and, he sighs, obviously a better one at 7 or thereabouts than 8.25). He points out that the company has a new management, which not only is free and clear of responsibility for the bad stuff that necessitated the ugly write-down, but seems to be doing all the right things. The company is still the biggest and most profitable pipeline operator around, Archie observes, and, despite the lowered reserve estimates, production should be right on plan this year. More to the point, El Paso continues to make solid progress shedding assets it doesn't want and getting surprisingly good prices for them, enabling it to steadily pare down its formidable pile of debt. The consummate long-term investor, Archie is betting on the emergence of a trimmer, more focused and financially sturdier outfit. And he's confident the stock will sell much higher. Mindful that investor sentiment has been curdled by the melancholy news on reserves, he has shaved a dollar or so off the 12-14 he projected for this year at the Roundtable. But he sees a much richer price down the road a piece. (EP should have a nice pop on Monday jumping into the lead in its race with RRI. Not that as a holder I don't want RRI to go up also. Further, comment from Argus Research following EP' proved reserves revision: they rate it a strong hold in that they feelEP's new management was overly conservative in their projection of oil and gas PRODUCTION and debt repayment. <Note: I can't give you the cite but its all over the EP Yahoo Board.>)