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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Metacomet who wrote (6794)	5/26/2006 12:24:22 PM
From: Elroy Jetson	Respond to of 217825

One has to be a little skeptical of a company like Syncrude which won't disclose the economics of their business. Their Book Value accounting tells us how profitable they are today, but it doesn't tell us how economically viable their business is. The costs to upgrade tar sand bitumen are significant, just the cost of the natural gas alone is large. I wouldn't be surprised if they are operating off of a fixed price gas contract made when prices were far lower. Its like a plastics manufacturer who "makes $20 profit" by selling plastic for $100 which contains $118 worth or natural gas. This good fortune only lasts as long as his fixed price contract enables him to buy $118 worth of natural gas for $62. .