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To: ms.smartest.person who wrote (2862)	11/12/2007 6:07:19 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition November 5, 2007 PETROCHINA COMPANY (Hong Kong Exchange) Scary, Scary, Scary… PetroChina Company was trading today in Shanghai and on its first day of trading almost tripled in value to become the world’s first company to be valued at a trillion dollars - more than Exxon Mobile and General Electric combined. Why is this scary? The move today makes PetroChina shares four times more expensive than Exxon, even though China’s biggest oil producer has only a quarter of the revenue. The two companies have largely the same reserves with PetroChina having 20.5 billion barrels and Exxon 22 billion barrels. PetroChina is now trading at 55 times earnings, which is four times what Exxon’s ratio of 13 times earnings is. And to say it’s overpriced would be an understatement, don’t you think? Warren Buffett thinks so as he had formerly a huge stake in the company, owning more than 2.3 billion shares, but he has sold. The scary part is there is now so many overpriced shares on the Chinese market, the question is, what happens if and when the Chinese market does have a correction because it’s trading at P/E ratios four and five times what North Americans are used to. So far the Chinese have only seen a market that goes up and it’s been going up for most of the last ten years. What happens when the first big correction hits and sooner or later you know that’s got to happen?… WESTERN KELTIC MINES (V-WKM) $0.29 +0.01 HOW NOT TO BUILD A JUNIOR MINING COMPANY! If a person has ever wondered about the role of investor relations and how important it is for a company to get their story told, so the company doesn’t have to endlessly dilute its shareholders, Western Keltic should be front and centre as an example of what not to do or how management has not gotten the job done. With the Kutcho project they have in northern B.C., a project that’s been worked on by different organizations over almost three decades, they have a rough idea of a fairly rich deposit, but it’s in the farther, northern part of B.C. and with the Canadian dollar making Canada a fairly expensive place to work, and services would also be expensive. It seems instead of producing metal though, they are producing nothing but paper as the company has done several financings and now has more than 80 million shares outstanding and 107 million shares fully diluted. Of course they need more money to take it to the next phase and they’ve just announced yet (you guessed it) another public financing. To raise $30 million at this level, that probably means an additional 100 million shares outstanding. With that kind of dilution, is there anything left at all for shareholders? ALBERTA CLIPPER (T-ACN) $1.91 -0.13 HIGHPINE OIL & GAS (T-HPX) $7.96 -0.47 LEADER ENERGY (V-LEE) $0.115 n/c MULLEN GROUP I.F. (T-MTL.UN) $17.05 -0.78 There’s been a lot of talk about the changes in the Alberta Royalty Review brought in by “Hugo” Stelmach and the market is quickly sorting out the winners and losers and the losers are showing up much more quicker than the winners ... if there were any winners, we can’t find any. Some of the biggest losers were those that have found what you’re looking for ... very productive wells. The Royalty rate really affects those producers. The chart on Alberta Clipper and Highpine shows exactly what’s happened to those two in particular. Also being dramatically affected are the service companies—the guys that do the drilling, do the fracing, do the seismic, you get the drift. Alberta Clipper Energy Highpine Oil & Gas Mullen Group Income Fund announced back on October 12th, that it would be initiating temporary lay-offs at several of its whollyowned business units due to uncertainty relating to oil and natural gas drilling activities in Western Canada. They also pointed out in that announcement that “many of our oil and gas customers have made it clear that they intend on reducing their capital investments in Alberta if the recently announced oil and gas royalty proposal is implemented.” Mullen Group I.F. It looks like that’s about to happen as huge companies like Canadian Natural Resources (CNQ) announced that they will be cutting, particularly their drilling for natural gas in the Province, by as much as 50%. They are moving their emphasis more so to BC, the North Sea and south of the border. Leader Energy shows you the same affect as another service company has been swacked, mainly because of the ongoing natural gas price weakness, but also now compounded by the Royalty problems. Leader announces today that due to a severe downturn in activity, they will be ceasing operations of its Canadian cementing division on November 7th. The chart shows what an owie it’s been for several of the service companies. Leader Energy Services If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com