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

To: howto who wrote (123705)	8/27/2009 10:40:42 PM
From: Ed Ajootian	Respond to of 206223

Howard, Legacy Reserves (LGCY) -- no news that I'm aware of. I think the stock got a bit ahead of itself when it hit $16, plus that marked a doubling in price from only March, so its likely that a lot of those folks that bought at $8 have cashed in their chips. With the spot oil price holding the $70 mark its looking more & more likely that the banks will in fact jack up their long-term oil price assumption to $60 for the upcoming borrowing base redetermination. This is good news for Legacy since it will result in a big increase to their borrowing base. I can see a great opportunity opening up for oil acquisitions in the next few months, when companies that have a lot of gas reserves get nailed by the banks' use of low price assumptions for natty, and are thus forced to sell some of their reserves to meet the resultant cash call. If such a company has some oil reserves, the best value they could get at this point would be to sell that oil (vs. gas), and Legacy would be more than happy to take it off their hands (but at a bargain price due to the forced sale aspects). Legacy does have some gas reserves also, but its only something like 15% of their reserves (6:1), so they will be helped by the increased oil prices much more than they will be hurt by the lower gas prices.