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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: pezz who wrote (51498)	7/9/2004 3:04:02 PM
From: energyplay	Read Replies (3) \| Respond to of 74559

CHK Chesapeak - has made some interesting bets, especially in Oklahoma. They have been buying up properties, borrowing money to pay for the properties, hedging forward enough to cover most of the debt service. They have been paying top dollar for these properties. The propetries tend to be close or contiguous. This allows for economies of scale, and with Oklahoma's pooling laws, some other advantages. (Which are too subtle for me to undersatand) CHK also gets all the logs, seismic, geophysical, and production data - now all in one hand. Almost all the properties have multiple zones for possible production - and in OK this can mean 4, 5, maybe 10 zones. One or two may have been produced, and only a few are included in the reserve calculation. In Oklahoma, there are often separate oil and gas zones. ****** There's an obvious advantge in cost control and economies of scale. Besides raw cost control, it may now be worth while to add compression to increase production. The knowledge of additional zones, etc. can mean multiple completion, some very high probablity infield drilling opportunities. So CHK is quiet leveraged, but with the upside pretty open. Drilling for the next few years should have high returns as CHK cherry picks best opportunities. They much of current production hedged to cover debt, and easy low risk opportunities to get new unhedged production. Going forward, I epect CHK will get better at multiple completions, and possible secondary & tertiary recovery methods - water flood, steam, CO2, solvent, etc. Antoher advantage with CHK is their market cap has grown with acquisitions so it can have more instituional investors, and rank higher in indexes. There's a pretty good premium ( at least 20%) for being in the > 2-3 Billion dollar market cap range. Most of what they bought was under 500 million. An insitutional buyer will see CHK as priced well under an APC Anadarko, APA Apache and the other usuall big NG companies, and now has enough shares and market cap to support large orders.

To: pezz who wrote (51498)	7/9/2004 7:29:20 PM
From: TobagoJack	Respond to of 74559

Pezz, on the face of it, sounds like a winner, and at so many tranches, you have certainly dove in, piled on, squeezed through and loaded up. Jay

To: pezz who wrote (51498)	7/16/2004 1:11:57 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hello Pezz, Today's Report: Typhoon day, and everywhere shut down early, but not before I purchased a full wallop of this Newocean Energy at finance.yahoo.com HKD 0.102/shr (USD 0.013/shr). They sell gas in China, is cashflow positive, some folks are buying, and so I tag along to feel the excitement. I may hold this baby as a long term investment, defined as anything beyond next week ;0) I have also liquidated a bunch of bonds and what not. Cleaning house again, in preparation for what invariably happen, and perhaps soon. Who knows? Chugs, Jay

To: pezz who wrote (51498)	7/16/2004 1:21:22 AM
From: TobagoJack	Respond to of 74559

I'm loving it ... to quote McD advertisement :0) Friday, July 16, 2004 New listings losing their appeal biz.scmp.com ANETTE JÖNSSON If there was any doubt before, Luen Thai Holdings' disappointing debut yesterday drummed home the message - new Hong Kong listings have lost their appeal. Three other newcomers have fallen below their issue prices this week after initially successful launches. Analysts say some recently listed stocks may have been kept artificially high by sponsors during their stabilisation period. Once that buying support ends - typically 30 days after the close of the initial public offering - investors may be less confident about holding on to stocks that have made only slight gains and choose to secure profits, they said. "The odds are in favour of selling," said Andrew Clarke, a salesman at Kim Eng Securities. "There are a lot of [uncertainty] issues that won't be resolved in the next one to two months so there is probably not going to be any dramatic movement up or down in the market." Investors who put their money on China Shipping Container Lines, steel sheet and pipe maker Mayer Holdings or research firm Plasmagene Biosciences - which all fell below their issue price on their debuts - were already aware of the risks in the wave of new listings that began at the end of May. But most observers had been suggesting that companies with share offers priced attractively compared with sectoral peers would still find buyers. This was certainly true for China Mengniu Dairy, instant messaging provider Tencent Holdings and sports goods maker Li Ning Co, which all gained when they came to market. This picture is now changing rapidly. Luen Thai, a Hong Kong-based garment manufacturer with high-profile names including Polo and Liz Claiborne among its customers, was expected to produce first-day gains of up to 10 per cent after the retail tranche of its $699.37 million IPO was 284 times subscribed. The firm had also cemented its partnership with blue-chip footwear maker Yue Yuen Industrial (Holdings), which bought a 9.9 per cent stake in Luen Thai in connection with the listing, inspiring confidence in its business model. Even so, the stock fell 6.72 per cent from its $2.87 offer price when it started trading yesterday, having reversed an early 5.04 per cent gain. Dealers said brokers mainly used by retail investors were active on the sell side, suggesting the overwhelming response to the IPO was not an indication of genuine interest in the company. "I think they were all subscribing to sell and when the stock started to head lower they were dumping at the first possible moment," a salesman at a local brokerage said. Guangdong-based property agent Hopefluent Group Holdings, which also began trading yesterday, fared even worse with a 9.33 per cent drop. Yesterday's third newcomer, Mitsumaru East Kit (Holdings), which supplies components for television sets, closed 0.93 per cent higher. Meanwhile, Ping An Insurance (Group), which listed three weeks ago, fell yesterday and is 7.06 per cent below its $10.33 IPO price, which it breached for the first time on Tuesday. Yesterday, Tencent and Li Ning suffered the same fate after falling 2.64 per cent and 6.89 per cent respectively. Wednesday's debutant, Pacific Basin Shipping, which finished unchanged on the first day thanks to heavy buying by its sponsor, dropped 8 per cent yesterday. Analysts say lingering uncertainty is hitting the market. "There is no conclusion about the Chinese economy ... and the US market is giving mixed signals," said Trevor Cheung, head of research at DBS Vickers. "Therefore everybody is looking to second-quarter earnings for a clear indication of how each sector or company has done." Hong Kong-listed companies will start to report earnings from the end of this month. Published in the South China Morning Post. Copyright © 2004. All rights reserved.