Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (12423)	9/23/1998 1:30:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Oil Worries Leave Alliance Pipeline Partners Jittery BY CAROL HOWES Calgary Bureau The Financial Post A slow recovery in oil prices has heightened worries over the producer-backed $3.8-billion Alliance Pipeline project, which still has to receive approval from the National Energy Board. Industry observers said yesterday partners in the natural gas pipeline are jittery about depleted cash flows from oil and slow natural gas production, raising the possibility the project may be delayed further. Oil revenue is crucial to financing natural gas drilling. The NEB, which is expected to release its final decision by the end of November, could also hold up construction if it decides there isn't enough new gas production to fill the system. It is intended to carry 1.3 billion cubic feet a day from northeastern British Columbia to Chicago. "The shippers are going to have to scramble to get gas anywhere they can," said one analyst, who asked not to be named. "I'd be stunned if the NEB did anything but rubber-stamp it, but you never know." Martin Molyneaux, a Calgary analyst with FirstEnergy Capital Corp., said not only is drilling this year lower than expected, but reserves are being depleted faster than forecast. New production isn't growing as fast as hoped. "Can we justify Alliance in a $14 to $15 WTI [West Texas intermediate] environment?" Molyneaux asked. "It's going to be a real struggle to fill what we've got and we're going to have to fill more." Construction is set to begin next spring. The project, which has already been delayed once, is intended to be in service in October 2000. Last week, the U.S. Federal Energy Regulatory Commission granted final approval of the U.S. portion of the pipeline. The certificate of approval, a 40-page document that contains a number of conditions, will be presented to Alliance board members today. The consortium will announce its response tomorrow. "There weren't any surprises in it after we reviewed it," said Jack Crawford, Alliance's vice-president of regulatory affairs. But analysts said with production increases lagging, producers and investors can be assured a battle is heating up between Alliance and TransCanada PipeLines Ltd. A TCPL expansion carrying 417 million cubic feet a day is scheduled to begin flowing gas Nov. 1. "I'm convinced for the first year or two there won't be enough gas for two lines," said one analyst. "They have to use Alliance, so they're going to have to steal from TransCanada."

To: Kerm Yerman who wrote (12423)	9/23/1998 1:40:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Resource Rebound On Canadian Stock Markets By DAVID THOMAS Economics Reporter The Financial Post Canada's previously battered resource stocks have stormed back with a vengeance this month, but analysts suspect the rally will be short lived. Commodity-related sectors rank as the top four in performance in the Toronto Stock Exchange 300 composite index in September. What's more, they account for all but one of the index's top 30 returning stocks and 73 of the top 80. But several portfolio managers say the surge is part of a short-term defensive rally and is unlikely to be sustained. They advise investors to remain cautious with most resource stocks, with the popular exceptions of those in the oil and gas sector. A lot of the recent bounce in gold, oil, metals and forestry stocks results from a perception the miserable performers could not fall any further, said Andrew Martyn, portfolio manager with Davis-Rea Ltd. Investment Counsel. "I think it's a bit of a hiding routine," said Martyn. Many institutional investors have to stay invested and the challenge during a selloff is to survive the storm, he explained. "When people really get clobbered, they start to look for value, rather than momentum. People ask: 'Where am I going to lose the least amount of money?' " For some traders the potential has been there to make a lot of money. While the broader TSE 300 has bounced back 5.3% from its low at the end of August, some of its subindexes have soared. The top performers are gold stocks (up 38%) and oil and gas stocks (up 21%). Trailing but still strong are metals and minerals (up 17.5%) and paper and forest products (up 10%). As a representative group, the 30 stocks that make up the resource subgroup of the TSE 100 index have rallied a little over 25% this month, nearly five times better than the broader market's gain. In another telling statistic, the 29 resource stocks among the TSE 300's top 30 performers this month have averaged a 46% advance. Martyn said trading in resource stocks remains thin and it hasn't taken much buying to get the battered prices on an upward roll. Despite the gains, the road back to respectability is also steep. The 52-week returns are still disastrous for golds (off 25.4%), oil and gas (off 30%), metals (off 38.4%) and paper and forest products (off 33.5%). Bob Boaz, a portfolio strategist with University Avenue Funds, joined Martyn in expecting this rally to fizzle, with the one possible exception - oil and gas stocks. Boaz sees the price of crude oil, which closed yesterday at US$15.67› a barrel in New York, headed back to the US$17 range. He said shareholders can look forward to stronger returns as profits improve. "Investors can get pretty significant returns if the oil market holds its value or goes higher." As for other resource sectors, Boaz said most of the buying has been based on the assumption stock prices can't go much lower. Gold stocks are vulnerable to a setback as bullion prices renew their long-term decline and base metals producers still have to contend with excess supply and slow global growth, he said. Thin trading volumes support the argument the surge in resource stocks is the result of bottom fishing by retail investors, rather than a change in sentiment among institutional money managers, he added. Meanwhile, few analysts are predicting a quick turnaround in commodity prices and some expect more weakness. Vincent L‚pine, senior economist at L‚vesque Beaubien Geoffrion Inc., is predicting another 5% decline in commodity prices, as measured by the CRB/Bridge index of commodity futures prices.

To: Kerm Yerman who wrote (12423)	9/23/1998 1:49:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / PanCanadian Petroleum Oil Recovery Project In Limbo CALGARY, Sept 22 (Reuters) - PanCanadian Petroleum Ltd. said on Tuesday a C$1.1 billion plan to bolster falling production at a big oil field in Saskatchewan was in limbo because its U.S.-based partner was re-evaluating its commitment to the project. PanCanadian, the energy arm of Canadian Pacific Ltd. , said Dakota Gasification Co. of Bismarck, N.D., was "re-examinating""plans build a pipeline for transporting carbon dioxide to the Weyburn oil field in Saskatchewan. The gas would be injected into the oil reservoirs to boost output. The partners in the project, which still requires regulatory approval, were scheduled to start injecting the carbon dioxide in December 1999. But PanCanadian said it now faced possible delays. "We're disappointed that this review is going to take place because it has the potential to delay the project which we remain very committed to," PanCanadian spokesman Alan Boras said. "We're going to do everything we can in discussions with DGC to see that it comes to fruition as planned," Boras added. Dakota Gasification's reasons for re-examining its investments in the project were not immediately known. Under the plans, first announced in the summer of 1997, Dakota would build a 330-km (205-mile) pipeline to the Weyburn field in southeast Saskatchewan from its Great Plains Synfuels coal gasification plant at Beulah, N.D. It would also supply carbon dioxide for the project from the plant. The plans were aimed at boosting oil production from the PanCanadian field to 30,000 barrels a day from the current 20,000. "PanCanadian remains committed to the CO2 enhanced recovery project for the Weyburn field and plans to continue the engineering and planning necessary for the construction of the project," the company said.

To: Kerm Yerman who wrote (12423)	9/23/1998 1:52:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Canada Spot Natural Gas Strengthens With Outages NEW YORK, Sept 22 (Reuters) - Canadian spot natural gas turned higher Tuesday, driven by the absence of supply due to natural gas plant outages and an early rally on NYMEX, industry sources said. Prices at Alberta's AECO storage hub were quoted at C$2.26-2.28 per gigajoule (GJ), up from Monday's average range of C$2.18-2.23. As of Monday evening, field receipts were down to 12.362 billion cubic feet per day (bcfd), while storage injections remained fairly steady at 522 million cubic feet per day (mmcfd). NOVA reported its Fox Creek Compressor Station will be out of service today and Wednesday to perform gas generator and skid inspections, and to replace the turbine containment shield. Interruptible deliveries as a result of the outage will be affected by about 40-140 mmcfd, the pipeline said in a statement. In the export markets, prices at Sumas/Huntingdon were talked mostly at US$1.63-1.64 per million British thermal units (mmBtu), indicating an average gain of about seven cents. Westcoast's Station 2 prices were also stronger at C$2.29-2.30 per GJ. Meanwhile, Niagara pricing latched onto the firmer futures market, leading to deals in the mid-$2.30s per mmBtu, sources said.

To: Kerm Yerman who wrote (12423)	9/23/1998 1:55:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Oil Ends Higher On Storm Fearsp NEW YORK (Reuters) - Oil prices closed higher Tuesday as Hurricane Georges closed oil refineries in the Caribbean and more storms raised concern about weather disrupting production in the Gulf of Mexico. The hurricane's threat to mining operations in the U.S. Virgin Islands and the Dominican Republic also closed operations and kept markets for nickel and aluminum on edge. Several weeks of hurricanes and tropical storms have interrupted offshore oil production and Gulf tanker loading schedules, leading to drawdowns in U.S. oil stocks. Talk of another such drop lifted oil prices Tuesday. At the New York Mercantile Exchange, crude oil for October delivery closed 18 cents higher at $15.67 a barrel. October gasoline ended 0.75 cent a gallon higher at 46.22 cents and October heating oil 0.17 cent a gallon higher at 42.16 cents. As of Tuesday afternoon, only minor damage had been reported at Amerada Hess Corp.'s refinery on St. Croix, Virgin Islands, where Hurricane Georges barreled through on Monday with 100-mile-per-hour winds and storm tides above seven feet. Amerada Hess said the hurricane caused no major damage to the 545,000 barrel per day unit, the largest refinery in the Western Hemisphere. The company expected to reopen the plant Wednesday. But as Georges headed toward the Dominican Republic and Haiti, two new tropical storms, Ivan and Jeanne, loomed farther out in the Atlantic Ocean. Forecasters said the storms were still too far off to affect the Gulf of Mexico.

To: Kerm Yerman who wrote (12423)	9/23/1998 2:02:00 AM
From: Kerm Yerman	Read Replies (3) \| Respond to of 15196

IN THE NEWS / Oil Chiefs To Meet For World Summit, Says Newspaper LONDON (AP) -- Heads of some of the world's biggest oil companies plan to meet in Europe next week to discuss the slump in crude prices and the growing global economic uncertainty, the Financial Times reported today. The summit of about 20 companies is thought to be the first time in recent years that oil industry chief executives have assembled informally for talks on the future of the sector, the newspaper said. The Financial Times report did not specify where in Europe the talks would be held. According to an unnamed organizer of the event, a senior U.S. energy lawyer has been invited to the summit to head off any suspicion that the oil giants intend to carve up markets or engage in price-fixing. The high-level talks follow British Petroleum's announcement last month that it will take over oil giant Amoco Corp in a $53.9 billion deal that would be the biggest industrial merger in U.S. history. The proposed marriage is currently being scrutinized by the U.S. government for its implications for competition in the marketplace. Companies expected to participate in next week's summit include some of the biggest oil groups, including the Royal Dutch/Shell Group, BP, Chevron Corp., Elf Aquitaine Inc., Total SA and ENI. Several of the largest state oil and gas groups, such as Saudi Aramco, the world's biggest oil producer and exporter, and Statoil of Norway, also plan to take part, along with the chief executives of several leading independent oil companies, the newspaper added. Russia will be represented by Gazprom, the country's biggest company and its largest single source of hard currency. The Financial Times quoted an unnamed senior European oil industry executive as predicting that more big deals could result from the gathering. "Everybody is on the prowl," he said. Royal Dutch-Shell offered a gloomy assessment of the oil business last week, predicting depressed oil prices won't recover any time soon, with the market glutted even as the ripple effects of the Asian economic crisis. Crude oil prices have plunged this year to levels unseen in a decade. The collapse started in the winter, when OPEC started pumping more oil just as the effects of the Asian economic crisis began choking off demand. OPEC has since said it would cut back production but its various members have not lived up to their commitments -- leaving all producers stuck with low prices. Besides discussing crude prices and the global economy, the oil industry chiefs are expected to debate a wide range of other issues, including growing environmental pressures and the impact of new technology, such as fuel cells, the Financial Times reported.