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

To: carranza2 who wrote (97144)	2/23/2008 4:37:33 PM
From: Fugitive Pauper	Read Replies (3) \| Respond to of 206329

The current yield on PWE is indeed terrific, but I have a strong suspicion that it will be materially reduced in the near future. The trust started making this statement a couple of months ago, primarily to sooth CNE unitholders about the impending acquisition: "Penn West's Board of Directors recently resolved to keep the Trust's distribution level at $0.34 per unit, per month, for the next three months based on current forecasts of commodity prices, production and planned capital expenditures." (quote from the most recent earnings report) If Canroy history is any guide, this statement is likely to be fair warning that "We intend to reduce the distribution in three months". This is just my speculation, of course, but it's speculation based on hard experience with Canroys over the years. My speculation is reinforced by the fact that (a) PWE has some very good assets, but they will require a great deal of money to develop -- money that is currently leaking away as distributions to unitholders, and (b) PWE never really wanted to be a trust in the first place; they would have preferred to remain a corporation, but shareholder demands and the higher valuation placed on trusts vs corporations (at the time) forced the conversion. I think it nearly certain that PWE will drift towards the E&P model even while they remain a trust. That may not be an altogether bad thing, but it will mean a substantial reduction in distributions and that will cause a lot of unitholder unhappiness and spark a lot of selling. Better to step back and observe until the dust from PWE's reinvention of itself has begun to settle. Full disclosure: I have been reducing my substantial PWE position over the past few months, and completed the selling last week in favor of LINE, CEP, and BBEP. All just IMVHO, of course.

To: carranza2 who wrote (97144)	2/24/2008 1:08:40 AM
From: energyplay	Read Replies (1) \| Respond to of 206329

Sounds like a well diversified portfolio. It seems that most of your positions are based on macro trends instead of specific stock picks. Adding some specific stocks like PWE is smart. A good place for some individual Oil & Gas stocks is Kurt Wulff's www.mcdep.com. He likes PWE. Check out Ed Ajootian's posts also. He has recommended BZP, and several people have done well - see the chart ;-) Lots of other good posters here, and on the Canadian Trusts thread. One major difference between Oil and Natgas - there is a worldwide infrastructure to move oil in almost in direction oil tankers can go, and oil can be move by truck, pipeline, or river barge. There is extensive oil storage but above and below ground - like the strategic petroleum reserve, and all the tanks for both crude oil and refined products like jet fuel, gasoline, etc. Natural gas is almost entirely moved by pipeline, it needs pipelines to get from the well onwards. LNG shipping capacity is limited, and there are small numbers of terminals worldwide. If there is not enough pipeline capacity, prices at the well can be much lower than at the destination. Wyoming had far more NG wells than pipeline capacity, and NG prices would be $3.50 while at the other end of the pipeline in Chicago, the price would be $8.50. Storage capacity for NG varies by country. The UK as relatively little storage, so the price of NG will go from under $4 in summer to over $20 in winter. There is more storage in the US, so the swings are not as extreme if the winter isn't cold and the summer isn't hot. If you were to consider buying one or two tech stocks, which ones do you like ?