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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 (38053)	1/4/2005 8:10:50 AM
From: Ed Ajootian	Read Replies (1) \| Respond to of 206093

jim_p, El Paso (EP) -- On the bearish theme would you agree that EP puts would do well if your predictions on natty prices come true? They had an interest coverage ratio of only around 1.9:1 in 3Q, and the natty strip for 1Q '05 is currently around the same place as the average bid week price for 3Q '04. Also, if I remember correctly they had said that if natty prices end any quarter under $6 they would have to take a write-down on their reserves. This would seem likely for 1Q. In fact, they may even have to take a writedown for 4Q '04. Correct me if I'm wrong, but I believe that GAAP has a rule to the effect that if natty prices drop after year-end to a point where you would need to take a write-down on your reserves, and are still at that point when you are reporting, you have to take the writedown retroactive to the end of the quarter you are reporting.