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Len - Popping the commodity bubble isn't going to be easy, cheap, or any time soon. You can't pop it with near zero inventory of the commodities. Grain prices at record highs are due to the lowest inventory in 30 years. 6.5 billion mouths to feed won't go away without a major die off. The investment has not been made in mines and the oil industry to flood the market with inventory.
The internet bubble was simple to pop. It was caused by a huge percentage of fiction and imagination...."new economy"...what a joke! The housing bubble was caused by, greedy bankers, real estate agents, and appraisers along with a willing FED and a bunch of kool-aid drinking home buyers. "Your house will never go down in price, it's never happened, ever!" Pop!
The commodity bubble will be propelled by the blizzard of paper fiat cash pouring into the system. Couple that with the 3rd world moving to the second, breeding all the way, and you can't pop it overnight.
My 2 cents.
Kipp
Question about distribution to trust unit holders.
Let's say the price the suit gets settled for is $10/unit. Immediately the MOSH price goes to $10, or does it go to $.05/unit and you get your payment as a unit holder at the end of the quarter. How are they going to handle the pay out? Some posts here say the royalties will resume again, so they are not going to disolve the trust on settlement?
I am also curious to know if the units can be shorted?
Does anyone have any examples of trust suits that were similar to Mosh?
Thanks,
Kipp
Welcome back cl001!
The energy stocks have been way better than the miners. I loaded up on POE, still have CXPO and TXCO. EXN has been holding up well. If they can delay pp to raise money for the new mill until the new year they may hang in there. Aun is nearing 52 week low and could be added to here. NGG had a little support off of mid-$.40's. The rest of the gold stocks are getting smacked down hard, all of our favorites look like buys exiting the year. The dollar bounced last week and long bonds were down in price and up on rates. There is an interesting lawsuit play on the zipcode board.
Good to have you posting again.
Kipp
Hank - Are the tax laws in Norway like ours? Will this stock be under more tax loss selling preassure? It looks like a good one to watch for a turnaround in January.
Kipp
Hank - Sulfuric Acid
I put a few hours in on trying to find a sulfuric acid play. Nothing so far due to these facts.
Sulfuric has been an industrial by-product that results from several large processes. The major one is the smelting of sulfite ore to produce most base metals. The ore is fed into a kiln or roaster to oxidize the ore. The resulting sulfur gas is collected and reacted with a catalyst to make sulfuric acid. The smelters call this "fatal" acid, due to the fact that they must get rid of it or they will drown in it. For decades the world was awash in acid and most of it was literally given to anyone that would haul it away. There were several blips when huge producers had unexpected short term outages, but most of the time acid has been a liability.
Hence, there are no "on purpose" sulfuric acid producers that I can find. Most of the producers have their acid sold on long term contracts and have very little "spot" acid to sell.
All I can say is that anyone invested in companies that consume major amounts of sulfuric acid, especially fertilizer and heap leech miners, needs to make sure those companies have contracted all of their needs. No acid means no production and nasty earnings surprises.
I don't think anyone will go out and build a sulfuric acid plant unless they are convinced the shortage is here to stay.
Kipp
Grain Harvest Sets Record, But Supplies Still Tight
Following several years of declining harvests, the world’s farmers reaped a record 2.316 billion tons of grain in 2007.1 (See Figure 1.) Despite this jump of 95 million tons, or about 4 percent, over the previous year, commodity analysts estimate that voracious global demand will consume all of this increase and prevent governments from replenishing cereal stocks that are at their lowest level in 30 years.2
The global grain harvest has nearly tripled since 1961, during a time when world population doubled.3 As a result, the amount of grain produced per person grew from 285 kilograms in 1961 to a peak of 376 kilograms in 1986.4 (See Figure 2.) In recent decades, as the growth in grain production has matched population growth, per capita production has hovered around 350 kilograms.5
But output per person varies dramatically by region. For instance, it stands at roughly 1,230 kilograms per year in the United States, most of which is fed to livestock, compared with 325 kilograms in China and just 90 kilograms in Zimbabwe.6
Economists, hunger activists, and agricultural researchers track world grain production because people still primarily eat foods made from grain. On average, humans get about 48 percent of their calories from grains, a share that has declined just slightly, from 50 percent, over the last four decades.7 Grains, particularly corn, in conjunction with soybeans, also form the primary feedstock for industrial livestock production.
People consume a little less than half (48 percent) of the world’s grain directly—as steamed rice, bread, tortillas, or millet cakes, for instance.8 Roughly one third (35 percent) becomes livestock feed.9 And a growing share, 17 percent, is used to make ethanol and other fuels.10
Although high crop prices have been pushing farmers around the world to plant more land in grains in recent years, a more powerful engine for the record output was a boost in average yields, the amount of grain harvested per hectare. For the last decade, grain yields have surpassed 3 tons—nearly three times the level in 1960.11 Near-perfect weather in major growing areas as well as an estimated 5 percent jump in world fertilizer use helped farmers increase yields.12
World grain production is concentrated in a number of ways—in terms of the species produced, where the crops are raised, and the major exporters. Corn, wheat, and rice account for about 85 percent of the global grain harvest (in terms of weight), with sorghum, millet, barley, oats, and other less common grains rounding out the total.13
China, India, and the United States alone account for 46 percent of global grain production; Europe, including the former Soviet states, grows another 21 percent.14 Argentina, Australia, Canada, the European Union (EU), and the United States account for 80 percent of wheat exports, while just three nations— Argentina, the EU, and the United States— account for 80 percent of corn exports.15
In 2007, a 200-million-ton jump in the global coarse grain harvest was responsible for nearly all of the increase in the total grain harvest. 16 Production of coarse grains—a group that includes corn, barley, sorghum, and other grains fed mainly to animals—increased 10 percent, from 985 million tons in 2006 to 1,080 million tons in 2007.17 At 784 million tons, the record harvest of corn was buoyed by the growing use of this grain to produce biofuels, which prompted farmers in the United States (responsible for over 40 percent of the global harvest and half of world exports), Brazil, and Argentina to plant more land to corn.18 Production in China, the world’s second largest corn producer, inched beyond the previous year’s record.19
Worldwide, the amount of coarse grains converted to energy jumped 15 percent to 255 million tons, although this is still small compared with the 627 million tons devoted to another relatively inefficient use—livestock feed.20
Wheat harvests increased modestly, by 2 percent, to 605 million tons, with near perfect weather nurturing strong harvests in India, the EU, and the United States.21 Australia, however, normally the source of one third of world exports, faced lower crop prospects and depleted exportable supplies.22 And unfavorable weather meant a reduced harvest in China, the world’s second largest producer.23
The global rice harvest was up slightly to 633 million tons, matching the record 2005 harvest, as conditions returned to normal in China, India, and across Asia, which accounts for 90 percent of world production.24
The amount of grain stored by governments— a good measure of the global cushion against poor harvests and rising prices—continues to decline. Global cereal stocks were expected to stand at 318 million tons by the close of the 2007 season, equivalent to about 14 percent of annual consumption.25 (See Figure 3.) These stocks, and the stock-to-use ratio, built up by bumper crops in the 1980s and the late 1990s, are now substantially below their all-time high.26
Despite the record harvest, the low stocks and strong demand combined to push prices of all cereals to new highs.27 At harvest time, the U.S. corn export price was up about 70 percent from the previous year, while the American hard wheat price averaged 65 percent more than a year earlier.28 Wheat prices in Argentina, another major exporter, doubled since 2006.29 Important wheat exporters like Ukraine and Russia have imposed export restrictions to ensure a sufficient domestic supply.30 Major importers, like Egypt, the European Union, Yemen, and Iraq, have reacted to high prices by purchasing grain early, which has further tightened supplies and boosted prices.31
As such increases ripple through the food chain, people around the world have been greeted with higher prices for bread, beer, corn flour, and other basic foods. Developing countries are likely to spend a record $52 billion on imports of cereals in 2007, up 10 percent from 2006.32 This follows a 36-percent hike in the previous season.33
Even international food aid programs, which also purchase their supplies on the world market, have been forced to scale back.34 The volume of aid provided through the largest assistance program in the United States, Food for Peace, dropped by nearly half since 2005, to 2.4 million tons, in response to a 35-percent increase in the cost of agricultural commodities as well as the rising costs of fuel for shipping.35 The combination of rising food costs and declining aid can be fatal for the estimated 854 million people worldwide who experience hunger on a regular basis.36
Expected Food-Cost Inflation!
http://online.wsj.com/article/SB119767626852730437.html?mod=googlenews_wsj
Hedge Funds Get Into the Act
By LAUREN ETTER Wall Street Journal
December 15, 2007; Page B1
The global commodities boom that has lifted prices of everything from gasoline to gold is now elevating rice -- a staple food for half of the world -- to its highest level in nearly 20 years.
Rice's surge has complex consequences for the global economy. Used in everything from sushi to burritos to Rice Krispies, the ubiquitous grain is suffering poor harvests and tight supplies in some of the biggest rice-exporting and rice-consuming nations, just as demand grows in places like India and the Philippines.
The higher price is a boon for some farmers and investors. But at the same time, it is expected to contribute to a protracted bout of food-price inflation for the foreseeable future, which could widen the rift between the world's haves and have-nots.
"At the end of the day, the fight will be between the industrialized world and the developing world," says Michael Lewis, managing director at Deutsche Bank.
A particular humanitarian concern is that the world's poorest consumers, many dependent on rice, often have little or no voice. "When they suffer food shortages, they starve in silence," says Joachim von Braun, director general at the International Food Policy Research Institute.
Soaring prices are drawing myriad investors into the market. On the Chicago Board of Trade, the number of bets outstanding on rice futures contracts recently reached a high -- a basic sign that more traders see a chance to make money on rising prices.
Nontraditional players, such as hedge funds, are now trading in rice, according to Fred Seamon, associate director of commodity research at the CBOT, and new exchange-traded investment products aimed at individual investors are also being rolled out. Two months ago, Jim Rogers, founder of the Rogers International Commodities Index, launched the Rogers Agricultural Exchange Traded Note.
While prices for other commodities like oil have been flirting with records in recent months, in inflation-adjusted terms, agriculture commodities still have room to rise before reaching that point. For example, the price of wheat will have to increase by 106% before it reaches its record high in real terms, according to Mr. Lewis at Deutsche Bank.
CRACKLING GAINS
• The News: Futures prices for rice are at 20-year highs, which may have implications for the global economy.
• Background: Most commodity prices have been booming world-wide.
• What's Next: There could be general food-price inflation, increasing the gap between rich and poor nations. Many of the poorest consumers depend on rice.As rice prices rise, food aid for developing countries is becoming scarcer. And the international price for broken rice, an affordable grade favored in many African countries, has increased 40% since last year, according to the United Nations Food and Agriculture Organization.
On the CBOT Friday, rice futures contracts settled at $13.1250 per 100 pounds, down 5.5 cents. That is up from $9.87 a year ago and just shy of the previous record price of $13.40, set in January 1988 when rice was traded at the Mid-America Exchange.
While prices like these aren't at record levels in inflation-adjusted terms, they nevertheless threaten to exacerbate poverty in large areas of the world.
Senegal Riot
One risk is that, in some cases, rising prices lead to food shortages and social unrest. Indeed, in November a riot that broke out in Senegal was in part attributed to higher prices for rice, a staple there. Protesters, throwing rocks and burning tires, were met with police firing tear gas.
The story of rice echoes that of nearly all commodities, whether petroleum, copper or wheat. Prices for many commodities are surging thanks to booming demand from emerging economies like China. It is having broad ripple effects: Steel prices make it costlier to construct buildings; the rising cost of oil helps to drive up the cost of world shipping rates.
Rising oil prices also make it costlier to grow and ship rice and other grains -- which, in turn, drives up food prices.
Human Impact
Agricultural commodities, of course, tend to have a more direct human impact than, say, oil or steel. Grains have been trading at or near historic highs partly because of a combination of growing demand for biofuels -- such as ethanol made from grain -- as well as a rising global population, which means more mouths to feed in the developing world.
In addition, the weaker dollar has helped to boost global rice prices, as most rice is traded in dollars. In Thailand, the world's largest rice exporter, the price of long-grain rice has increased nearly 20% since last year, according to Nathan Childs, senior economist at the Department of Agriculture.
All these factors have depleted global grain stocks to levels not seen in decades. Wheat stocks are at their lowest level in 60 years. Rice stocks are at 24-year lows.
Complicating matters: Historically, rice has been a thinly traded market. Only about 7% of global rice production is traded on the world market, according to Mr. Childs. This means that, in the event of a supply shock, rice importers have to scour the globe for available supplies, driving up the price even further. For comparison, about 16% of other grains, like wheat and corn, are traded globally.
Permanent Trend
Increased demand and tightening supplies are likely to persist. The Agriculture Department estimates that food prices will increase about 4.5% this year over last, compared with a 2.4% annual increase last year. In the developing world, food prices have increased about 9% over last year, according to the International Monetary Fund.
Higher food costs tend to hit people in poor countries harder than those in developed countries as households in developing countries spend a larger percentage of their income on food. In the U.S., food makes up about 18% of the overall consumer-price-index basket, compared with as much as 40% in some emerging economies, according to a report by Deutsche Bank.
For countries that rely on donations or aid to feed the hungry, higher prices can mean less food. At the United Nations World Food Program, rice is the third-most-frequently purchased commodity, and it supplies more than 70% of caloric intake in poor countries like Cambodia.
"If prices go up we'll be getting less of that particular commodity," says WFP spokeswoman Jennifer Parmelee. She says the price of procuring food has increased 50% over the past five years.
Since 2000, global rice consumption has increased 7.5%, while production increased about 5.4%. As supplies run short, the risk for the world market is that big rice exporters start keeping the food for themselves rather than selling it on the market, further driving up prices.
In July, Vietnam -- the world's second-largest rice exporter after Thailand -- said it would restrict rice exports in order to meet domestic needs first. India, another large exporter, announced similar export restrictions in October.
The U.S. accounts for only about 1.5% to 2% of global rice production, but it is the fourth-largest exporter, behind Thailand, Vietnam and India.
This year, U.S. rice acreage was 3% smaller than last year because of strong prices for competing crops, like corn and soybeans. However the crop is estimated to be 2% bigger because of higher yields. U.S. exports are expected to be nearly 20% higher than last year.
Write to Lauren Etter at lauren.etter@wsj.com
Craze for Biofuel Causes Grain Prices to Soar
http://www.marketoracle.co.uk/Article2953.html
We think the higher food prices now being seen in the global markets is a long term trend. Last month we continued to increase our exposure to the agriculture sector. The following developments last month illustrate the bullish trends:
The boom in biofuels is boosting demand and constraining food supplies; 20% of the US corn crop is already used to produce ethanol. Agricultural commodities are the subject of a growing battle between energy demands and food demands of the world's population. The UN's World Food Organization predicts that demand for biofuels will grow by 170% in the next three years.
Wheat prices surged to record highs last month. Expectations are that rising global demand for U.S. wheat will deplete inventories, leaving them at the lowest level in three decades. Wheat prices on the Chicago Board of Trade topped $9 a bushel for the first time ever.
The U.S. Department of Agriculture cut its estimate of Australia's wheat crop to 21 million metric tons from last month's estimate of 23 million tons. Australia was expected to be the world's second largest wheat exporter. The USDA's estimate of Canada's wheat crop also declined 5.6 percent last month.
The USDA raised its' forecast of expected wheat exports as foreign buyers are flocking to the U.S. The world market expects poor harvests in major producing regions, and rising demand from industrializing nations such as China.
The USDA estimates crop-year ending stocks of wheat will fall to 362 million metric tons in 2007- 2008, down from 456 million metric tons a year earlier. This is the lowest inventory level since 1973-1974.
Ukraine was the world's seventh-biggest wheat exporter last year. The Ukraine government said it will restrict grain exports last month to moderate domestic food price increases.
Russia, last year's third-largest wheat exporter behind the U.S. and Canada, said it may impose a 10 percent export tax on the grain in November and a 30 percent export duty on barley.
Global wheat inventory stockpiles at the end of June in the five biggest-exporting countries fell to 107 million tons, a 34-year low. Wheat was the fourth-biggest U.S. crop in 2006, behind corn, soybeans and hay, according to government data.
The higher wheat prices have increased the cost of staple foods such as bread and pasta. Higher pasta prices prompted consumer groups in Italy to launch a one-day boycott of pasta last month. Prices there have soared as much as 20 per cent over the last several months.
Corn prices hit a three-month high last month after China signaled that it could become a net importer for the first time in more a decade. One of the world's four biggest corn exporters last year, China will encourage more imports of the grain, and discourage domestic output of crop-based fuels, in an attempt to keep food inflation under control.
The amount of U.S. lands planted in corn has increased 18.5 percent this year, from 78.3 million acres last year to 92.9 million acres. The USDA forecast that fertilizer use should increase by 5 percent overall, with use on corn up 9.5 percent.
The USDA is forecasting record fertilizer expenditures for 2007. Fertilizer accounts for roughly 20% of a corn farmer's operating cost.
Over the last year the price of eggs went up by 33.7 percent, whole milk 31.1 percent, and navel oranges were up by 13.6 percent in the U.S. according to a government report. Other dramatic increases included fresh chicken up by 8.4 percent, apples up by 8.7 percent, and dried beans up by 11.5 percent.
Barley prices in Winnipeg, Canada, gained 41 percent in the past year on increased demand for animal feed and for brewing beer. Canada is one of the world's biggest barley producers. Corn has gained 53 percent in that market as demand for grain-based ethanol surged.
Driven by a combination of trade policies and competition for cattle feed from biofuel producers, global milk prices have doubled over the last two years. There are reports of cows being stolen from Wisconsin dairy farms.
Developing countries face serious social unrest as they struggle to cope with soaring food prices, the United Nations' top agriculture official warned last month. While food may be less than 10 per cent of the household budget in the developed world, in poorer countries it is 65 per cent.
The USDA is expecting a record breaking year for agricultural exports from the U.S. Exports are expect to reach a record $79 billion in fiscal year 2007, topping the old record set the previous year. USDA says sales are expected to reach another record in 2008.
The value of all U.S. crop production this year is forecast to rise 14 percent from 2006, to $136.2 billion. The value of production from cattle, hogs, chickens and eggs will increase 18 percent, to a record $140.2 billion
Rising prices for livestock and grains should push U.S. net farm income to a record high in 2007, 48 percent greater than a year earlier according to the USDA. Farm income is expected to rise to $87.1 billion from $59 billion last year. "This is a great time to be a farmer," said Christopher Hurt, an economist at Purdue University in West Lafayette, Ind. "Farming may be the healthiest sector of the economy."
A rise in agricultural income could boost sales of farm machinery, seeds, and farmers will also be able to afford more fertilizer according to agricultural economists.
A boost in farm income this year has accelerated agricultural equipment sales according to representatives of the equipment manufacturing industry. Combine sales are up so far this year by nearly 9 percent according to Russ Green, president of Caterpillar's North American operations. “Obviously there is reason for optimism,” Green said. “Usually 14-18 months after an upturn in commodity prices we'll see an upturn in equipment sales.”
Ag Equipment Newsletter, a publication for agricultural equipment marketers, in its Sept. 15 issue reported results of its annual survey of North American equipment dealers, noting, “It's difficult to find a product category that dealers aren't enthused about next year.”
When we examine firms that appear on our financial screens we focus on their business niche. A business niche that is growing, provides for expanding margins, and provides opportunities for thinly capitalized companies is ideal for investors.
Warren Buffett has noted that a ‘good business boat' – a company in an expanding business sector with a good niche - will make even marginal management look good. Investors in these situations tend to do well. On the flip side a shrinking business sector with poor margins will challenge even the best managers.
We think the higher food prices, increasing global demand, biofuel expansion, and expanding U.S. exports are long term trends that will create a positive business environment for small companies. For that reason we are increasing our exposure to small, growing, profitable, and undervalued firms in this sector.
By Joseph Dancy,
Adjunct Professor: Oil & Gas Law, SMU School of Law
Advisor, LSGI Market Letter
Crude Oil Demand to Continue Accelerating for Decades - Energy Sector Trends Analysis
http://www.marketoracle.co.uk/Article3098.html
Steel Inventory Levels Near Low Point for Current Cycle
(I am going to post some facts and figures on global commodity inventories to support my point that this is going to be a financial recession, not a recession caused by overproduction of commodities and lack of demand. Kipp)
Here is one on steele and aluminium:
by Metal Producing & Process (mppstaff@penton.com)
Service centers’ shipping show modest increase in October
November 15, 2007 — Metal service centers reported increased steel shipment levels during October for the first time since August 2006, but inventory levels continued to decline as processors and distributors continue to sell off excess stocks. These efforts have driven inventories to a levels that the Metal Service Center Institute recognizes as “at or near their cyclical lows.”
The MSCI’s monthly Metals Activity Report is based on data reported by steel and aluminum service centers in Canada and the U.S.
October steel shipments from U.S. service centers totaled 4.7 million tons, a rise of 1.7% over October 2006 levels, but down 2.3% on a seasonally adjusted rate. U.S. centers’ steel inventories totaled almost 12.26 million tons at the end of the month, a decline of 27% from the October 2006 inventory level, and the lowest steel inventory posting since March 1998 (12.25 million tons.)
At the current shipment rate, U.S. service centers have a 2.6-month supply of steel.
Canadian centers shipped 331,700 tons of steel in October, -1.7% from October 2006 and down 6.6% on a seasonally adjusted rate.
At their current shipping rate, Canadian centers have a 3.3-month supply of steel.
Aluminum shipments totaled 102,100 tons from U.S. service centers in October, -3.9% from October 2006, and -7.9% at the seasonally adjusted rate.
According to MSCI, October aluminum inventories totaled 271,500 tons, -30.8% from October 2006, and the lowest level since June 2002 (261,000 tons.) The October inventory level indicates a 2.7-month supply of aluminum at current shipping rates.
In Canada, service centers shipped 10,500 tons of aluminum during October, -0.7% from October 2006, and down 4.8% on a seasonally adjusted basis. Canadian centers’ aluminum inventories totaled 27,800 tons at the close of the month, -15.6% from October 2006, and representing a 2.7-month supply.
Bobwins - I found what you are looking for here in the original filing:
http://www.mosh-info.byethost32.com/Lawsuit_Original_Petition_04_11_05%20pg%201-10.pdf
In a nut shell, MOSH is claiming Pioneer found gas on the trust property and deliberately sat on it in an effort to get the trust dissolved before developing the field.
This is interesting but way out of our usual VMC investing style. I got a few shares on Friday. If nothing else I will get an education on trusts and Texas law.
rogue - another point
Look at the y/y money creation at the bottom of the page at this link:
http://www.financialsense.com/economy/main.html
There is a blizzard of paper cash showering the global markets. I'm not sold on the deflation argument. The dollar may bounce for a few weeks/months but there's nothing to supprt it longer term as long as the presses are going full tilt. The FED is going to cut rates again, forcing other countries central banks to follow us down to save their exports.
I feel commodities are the only hedge and will continue to rise in price. Inventories of everything are at lows and the investment in production infrastructure never happened to the degree needed. 6.5 billion people are demanding food and energy, regardless of what U.S. residential realestate does. This is a financial recession, not a commodity inventory recession.
Kipp
rougue - What makes the Chinese currency any different than other paper fiat cash. Do they back it with gold, silver, oil,??? Do you think China is immune from political melt down. Are the Chinese going to take to the streets when food and energy prices soon double? Paper money is paper money right?
Just a thought.
Kipp
BB King - I was in some other stock with you a long time ago, can't remember what it was? Anyway, I have never been involved in shares of a trust. Can you explain to me how exactly a settlement would be paid out? I am trying to understand what will happen to the stock price after the settlement. Would a divy be paid to shareholders of record as of a certain date? Would the stock price collapse after the payment? Is the tax rate 15%, or the same as a short term hold on a stock?
I checked out your board and bought a few shares on Friday.
Thanks,
Kipp
Len, I was up in Canada and had my picks ready to go for PSL7. The resort had a direct lightning hit on the intenet system and took it out. I will be home the week of the 11th and I might even get my picks in early this time. I usually enter at the last minute, say I get my picks to you early that week, if something changes would it be too much trouble to make a last minute change? Sitting it out is no fun so I'm not chancing the last minute entry method again!
Kipp
Len, it killed me to miss the deadline for PSL7! Did you set up the PSL8 board yet?
I shall return!
Thanks for all of your work!
Kipp
Sprott Pumping POE on BNN
http://broadband.bnn.ca/bnn/?id=2238&vid=24586
Kipp pumping POE on VMC....shameless!
Sprott Pumping POE on BNN
http://broadband.bnn.ca/bnn/?id=2238&vid=24586
Kipp pumping POE on VMC....shameless!
Table Pounder POE.V (POEFF) UP!
At $12.50 now. This will be a $40 stock in April. They have a good chance to be north of $100 exiting 2008. Wells cost $800,000 to drill and are currently being paid back in 8 days to 2 weeks Here is the latest IR presentation. Search my posts for recent release on gusher wells being drilled in Thailand. 28 more wells to be drilled in 2008.
http://www.panorient.ca/2007PPupdated-Oct-22.pdf
I also like CXPO.OB and TXCO for oil in 2008. Inflation is here and we are going to see higher commodity and precious metal prices.
Good Luck!
Kipp
WSII - Interesting open market buys.
I got this in an email from a fellow investor. WSII is in the trash/landfill business.
"Westbury appears to have bot 53,777 more shares of WSII over the last several days. That brings there total bot lately in the open market to over 200,000 shares and their net holding to 12,319,553. Looks like a serious buyer to me."
Could be a buyout in the works?
Kipp
CXPO, TXCO, POE.V - LOOK AT THIS.
I owned ARD from $9 to $40, pre split. It is now $82. Look at these financials:
http://finance.yahoo.com/q/is?s=ard
My favorite 3 oil stocks are going to do the same thing. Grow top and bottom line through the drill bit!
Kipp
gilead - Please put your pick on Ebay so I at least have a chance to outbid everyone and load up first! I don't think I ever pounded the table on anything until yesterday with POE.V (POEFF). I loaded up before the pound, of course!
Good Luck!
Kipp
Mike, I am totally screwed at work. Could you guys post what you find here. I am thinking there is huge opportunity but haven't a clue as to what companies will score big. Most of the acid procucers seem to be integrated producers of something elase. You have to understand that sulfuric acid has been a liability as long as anyone can remember. The world was awashin it forever!
kipp
No POE press release on the main wires yet. Nothing I can find on Stockhouse, Yahoo, etc. There will be another big pop when the news of the largest gusher ever drilled onshore in Thailand is released!
I am ALL IN!
Kipp
Sulfuric Acid Shortage
I found this September story on Sulfuric acid. Our plant manager had a meeting with a supplier that told him the spot acid price is now $300/ton!!!! We were paying $58/ton delivered 18 months ago. The supplier said ethanol plants, fertilizer producers, and "remote" mining companies are all running short on acid. Make sure you understand supply positions if you own companies that are large sulfuric acid consumers!
Sulfuric acid is suddenly scarce and expensive
Increased demand for biofuels like ethanol tighten supply of sulfuric acid for chemical buyers.
By Gordon Graff -- Purchasing, 9/13/2007
Vigorous demand, a static supply and declining imports have combined to drive up U.S. sulfuric acid prices for much of this year. And market watchers say these conditions are likely to continue for at least another year.
Not only is sulfuric acid supply tight, but there is a scarcity of railcars to deliver the chemical, prompting concern among some buyers.
Agriculture and metals processing are the two hottest markets for sulfuric acid right now. Roughly 60% of sulfuric acid produced goes into agriculture, primarily in the manufacture of phosphate fertilizers. The biofuels boom, particularly the proliferation of ethanol plants, is having a "double effect" on the demand for sulfuric acid, says Paul Bacon, business director at Rhodia Eco Services, a French sulfuric acid producer. First, he notes, there is the need for more fertilizer to grow corn, which is the ultimate source of most fermentation ethanol. In addition, he says that ethanol plants consume sulfuric acid in their own processing operations. In fact, each new ethanol plant requires anywhere from 2,000–4,000 tons of sulfuric each year, according to Marsulex, a Toronto-based sulfuric acid producer.
Outside the U.S., there is a swelling demand for agricultural fertilizers in China and India. Traditionally, says Bacon, fertilizer makers in these countries have produced their own sulfuric acid. But their needs have outstripped their production capacity, he adds, so they are increasingly importing the acid, further boosting demand for sulfuric.
Meanwhile, the "global boom in construction" has stepped up purchases and prices of such metals as copper and nickel, says Bacon, and production of such metals consumes sulfuric acid in ore leaching processes. While smelting of nonferrous metals yields sulfuric acid as a byproduct, metals producers now need more sulfuric than they can produce internally, Bacon notes, forcing them to buy the acid to address the shortfall. And with copper prices at three times their historical averages, metals companies are willing and able to pay "a lot more" for sulfuric than they were a few years ago, Bacon says.
In other markets, Bacon sees current growth for sulfuric acid in gasoline production and petrochemical processing roughly paralleling GDP.
As for sulfuric acid supply, there has been a "dramatic decrease in production facilities" of the acid over the past five to seven years, says Key Compton, president of sulfuric producer Southern States Chemical, based in Savannah, Ga. The shutdowns, he adds, are a legacy of an "oversupplied market" for sulfuric acid, plus relatively anemic sulfuric acid prices, which didn't perk up until early this year. In fact, as late as November 2006, GenTek said it would close its Newark, N.J. sulfuric acid facility due to "adverse market conditions."
Strong fertilizer and metals markets, capacity limits, and costlier sulfur are poised to push sulfuric prices into even higher regimes.
Despite the recent pickup in demand, there is little or no new capacity on tap for sulfuric acid, says chemicals analyst Trey Hamblet of Industrial Information Resources in Sugarland, Texas, which tracks plant construction. Of about $89 million in sulfuric project activity in the U.S. this year, he notes, the "vast majority" of the funds are earmarked for planned maintenance and turnaround, rather than expanded production capacity.
In the past, U.S. buyers of sulfuric acid would have turned to foreign suppliers when there wasn't enough domestic product to go around. But foreign suppliers are now bypassing the U.S., Compton says, because of more attractive sulfuric acid pricing environments in other countries. This fact, coupled with scheduled shutdowns at some U.S. plants for maintenance, could lead to "a serious shortfall" of sulfuric in the fourth quarter of this year, he adds. To deal with this situation, Compton says his company is giving top priority to meeting its delivery commitments to its existing sulfuric customers, and is "unable to assist" new customers, particularly those from outside its core market region in the Southern states.
But constrained supply isn't the only problem besetting buyers of sulfuric acid. Transportation, particularly a shortage of railcars, has become an issue. For example, major fertilizer maker Martin Midstream Partners in Kilgore, Texas complained last year that its deliveries of sulfuric acid by rail had been "inconsistent" over the preceding two or three years. To alleviate that headache, the company recently completed a new sulfuric acid plant at its Plainview, Texas fertilizer facility. That unit will supply all the plant's sulfuric needs, and create enough excess to sell into the merchant market.
In response to escalating demand and limited supplies, price tags of sulfuric acid have reached record highs in the past few months (see chart). Also driving the rises is more expensive sulfur, a key sulfuric acid raw material. Looking ahead through the end of 2008, Compton says, "I do not see anything that is likely to change" the supply, demand and raw materials picture in sulfuric. Eventually, he adds, higher U.S. tags for sulfuric may attract more imports and put a cap on domestic price hikes. But for the near-term, particularly around the end of this year, he says, domestic customers "may be paying prices for sulfuric acid that they've never seen before."
Sulfuric Acid Shortage
I found this September story on Sulfuric acid. Our plant manager had a meeting with a supplier that told him the spot acid price is now $300/ton!!!! We were paying $58/ton delivered 18 months ago. The supplier said ethanol plants, fertilizer producers, and "remote" mining companies are all running short on acid. Make sure you understand supply positions if you own companies that are large sulfuric acid consumers!
Sulfuric acid is suddenly scarce and expensive
Increased demand for biofuels like ethanol tighten supply of sulfuric acid for chemical buyers.
By Gordon Graff -- Purchasing, 9/13/2007
Vigorous demand, a static supply and declining imports have combined to drive up U.S. sulfuric acid prices for much of this year. And market watchers say these conditions are likely to continue for at least another year.
Not only is sulfuric acid supply tight, but there is a scarcity of railcars to deliver the chemical, prompting concern among some buyers.
Agriculture and metals processing are the two hottest markets for sulfuric acid right now. Roughly 60% of sulfuric acid produced goes into agriculture, primarily in the manufacture of phosphate fertilizers. The biofuels boom, particularly the proliferation of ethanol plants, is having a "double effect" on the demand for sulfuric acid, says Paul Bacon, business director at Rhodia Eco Services, a French sulfuric acid producer. First, he notes, there is the need for more fertilizer to grow corn, which is the ultimate source of most fermentation ethanol. In addition, he says that ethanol plants consume sulfuric acid in their own processing operations. In fact, each new ethanol plant requires anywhere from 2,000–4,000 tons of sulfuric each year, according to Marsulex, a Toronto-based sulfuric acid producer.
Outside the U.S., there is a swelling demand for agricultural fertilizers in China and India. Traditionally, says Bacon, fertilizer makers in these countries have produced their own sulfuric acid. But their needs have outstripped their production capacity, he adds, so they are increasingly importing the acid, further boosting demand for sulfuric.
Meanwhile, the "global boom in construction" has stepped up purchases and prices of such metals as copper and nickel, says Bacon, and production of such metals consumes sulfuric acid in ore leaching processes. While smelting of nonferrous metals yields sulfuric acid as a byproduct, metals producers now need more sulfuric than they can produce internally, Bacon notes, forcing them to buy the acid to address the shortfall. And with copper prices at three times their historical averages, metals companies are willing and able to pay "a lot more" for sulfuric than they were a few years ago, Bacon says.
In other markets, Bacon sees current growth for sulfuric acid in gasoline production and petrochemical processing roughly paralleling GDP.
As for sulfuric acid supply, there has been a "dramatic decrease in production facilities" of the acid over the past five to seven years, says Key Compton, president of sulfuric producer Southern States Chemical, based in Savannah, Ga. The shutdowns, he adds, are a legacy of an "oversupplied market" for sulfuric acid, plus relatively anemic sulfuric acid prices, which didn't perk up until early this year. In fact, as late as November 2006, GenTek said it would close its Newark, N.J. sulfuric acid facility due to "adverse market conditions."
Strong fertilizer and metals markets, capacity limits, and costlier sulfur are poised to push sulfuric prices into even higher regimes.
Despite the recent pickup in demand, there is little or no new capacity on tap for sulfuric acid, says chemicals analyst Trey Hamblet of Industrial Information Resources in Sugarland, Texas, which tracks plant construction. Of about $89 million in sulfuric project activity in the U.S. this year, he notes, the "vast majority" of the funds are earmarked for planned maintenance and turnaround, rather than expanded production capacity.
In the past, U.S. buyers of sulfuric acid would have turned to foreign suppliers when there wasn't enough domestic product to go around. But foreign suppliers are now bypassing the U.S., Compton says, because of more attractive sulfuric acid pricing environments in other countries. This fact, coupled with scheduled shutdowns at some U.S. plants for maintenance, could lead to "a serious shortfall" of sulfuric in the fourth quarter of this year, he adds. To deal with this situation, Compton says his company is giving top priority to meeting its delivery commitments to its existing sulfuric customers, and is "unable to assist" new customers, particularly those from outside its core market region in the Southern states.
But constrained supply isn't the only problem besetting buyers of sulfuric acid. Transportation, particularly a shortage of railcars, has become an issue. For example, major fertilizer maker Martin Midstream Partners in Kilgore, Texas complained last year that its deliveries of sulfuric acid by rail had been "inconsistent" over the preceding two or three years. To alleviate that headache, the company recently completed a new sulfuric acid plant at its Plainview, Texas fertilizer facility. That unit will supply all the plant's sulfuric needs, and create enough excess to sell into the merchant market.
In response to escalating demand and limited supplies, price tags of sulfuric acid have reached record highs in the past few months (see chart). Also driving the rises is more expensive sulfur, a key sulfuric acid raw material. Looking ahead through the end of 2008, Compton says, "I do not see anything that is likely to change" the supply, demand and raw materials picture in sulfuric. Eventually, he adds, higher U.S. tags for sulfuric may attract more imports and put a cap on domestic price hikes. But for the near-term, particularly around the end of this year, he says, domestic customers "may be paying prices for sulfuric acid that they've never seen before."
Sulfuric Acid Shortage
I found this September story on Sulfuric acid. Our plant manager had a meeting with a supplier that told him the spot acid price is now $300/ton!!!! We were paying $58/ton delivered 18 months ago. The supplier said ethanol plants, fertilizer producers, and "remote" mining companies are all running short on acid. Make sure you understand supply positions if you own companies that are large sulfuric acid consumers!
Sulfuric acid is suddenly scarce and expensive
Increased demand for biofuels like ethanol tighten supply of sulfuric acid for chemical buyers.
By Gordon Graff -- Purchasing, 9/13/2007
Vigorous demand, a static supply and declining imports have combined to drive up U.S. sulfuric acid prices for much of this year. And market watchers say these conditions are likely to continue for at least another year.
Not only is sulfuric acid supply tight, but there is a scarcity of railcars to deliver the chemical, prompting concern among some buyers.
Agriculture and metals processing are the two hottest markets for sulfuric acid right now. Roughly 60% of sulfuric acid produced goes into agriculture, primarily in the manufacture of phosphate fertilizers. The biofuels boom, particularly the proliferation of ethanol plants, is having a "double effect" on the demand for sulfuric acid, says Paul Bacon, business director at Rhodia Eco Services, a French sulfuric acid producer. First, he notes, there is the need for more fertilizer to grow corn, which is the ultimate source of most fermentation ethanol. In addition, he says that ethanol plants consume sulfuric acid in their own processing operations. In fact, each new ethanol plant requires anywhere from 2,000–4,000 tons of sulfuric each year, according to Marsulex, a Toronto-based sulfuric acid producer.
Outside the U.S., there is a swelling demand for agricultural fertilizers in China and India. Traditionally, says Bacon, fertilizer makers in these countries have produced their own sulfuric acid. But their needs have outstripped their production capacity, he adds, so they are increasingly importing the acid, further boosting demand for sulfuric.
Meanwhile, the "global boom in construction" has stepped up purchases and prices of such metals as copper and nickel, says Bacon, and production of such metals consumes sulfuric acid in ore leaching processes. While smelting of nonferrous metals yields sulfuric acid as a byproduct, metals producers now need more sulfuric than they can produce internally, Bacon notes, forcing them to buy the acid to address the shortfall. And with copper prices at three times their historical averages, metals companies are willing and able to pay "a lot more" for sulfuric than they were a few years ago, Bacon says.
In other markets, Bacon sees current growth for sulfuric acid in gasoline production and petrochemical processing roughly paralleling GDP.
As for sulfuric acid supply, there has been a "dramatic decrease in production facilities" of the acid over the past five to seven years, says Key Compton, president of sulfuric producer Southern States Chemical, based in Savannah, Ga. The shutdowns, he adds, are a legacy of an "oversupplied market" for sulfuric acid, plus relatively anemic sulfuric acid prices, which didn't perk up until early this year. In fact, as late as November 2006, GenTek said it would close its Newark, N.J. sulfuric acid facility due to "adverse market conditions."
Strong fertilizer and metals markets, capacity limits, and costlier sulfur are poised to push sulfuric prices into even higher regimes.
Despite the recent pickup in demand, there is little or no new capacity on tap for sulfuric acid, says chemicals analyst Trey Hamblet of Industrial Information Resources in Sugarland, Texas, which tracks plant construction. Of about $89 million in sulfuric project activity in the U.S. this year, he notes, the "vast majority" of the funds are earmarked for planned maintenance and turnaround, rather than expanded production capacity.
In the past, U.S. buyers of sulfuric acid would have turned to foreign suppliers when there wasn't enough domestic product to go around. But foreign suppliers are now bypassing the U.S., Compton says, because of more attractive sulfuric acid pricing environments in other countries. This fact, coupled with scheduled shutdowns at some U.S. plants for maintenance, could lead to "a serious shortfall" of sulfuric in the fourth quarter of this year, he adds. To deal with this situation, Compton says his company is giving top priority to meeting its delivery commitments to its existing sulfuric customers, and is "unable to assist" new customers, particularly those from outside its core market region in the Southern states.
But constrained supply isn't the only problem besetting buyers of sulfuric acid. Transportation, particularly a shortage of railcars, has become an issue. For example, major fertilizer maker Martin Midstream Partners in Kilgore, Texas complained last year that its deliveries of sulfuric acid by rail had been "inconsistent" over the preceding two or three years. To alleviate that headache, the company recently completed a new sulfuric acid plant at its Plainview, Texas fertilizer facility. That unit will supply all the plant's sulfuric needs, and create enough excess to sell into the merchant market.
In response to escalating demand and limited supplies, price tags of sulfuric acid have reached record highs in the past few months (see chart). Also driving the rises is more expensive sulfur, a key sulfuric acid raw material. Looking ahead through the end of 2008, Compton says, "I do not see anything that is likely to change" the supply, demand and raw materials picture in sulfuric. Eventually, he adds, higher U.S. tags for sulfuric may attract more imports and put a cap on domestic price hikes. But for the near-term, particularly around the end of this year, he says, domestic customers "may be paying prices for sulfuric acid that they've never seen before."
POE.V - 5 year estimate done by "nutsaboutgolf" a couple weeks ago:
Posted by: nutsaboutgolf2001
In reply to: None Date:11/12/2007 12:59:45 AM
Post #of 1505
POE Financial Model
By the way CVN closed up 10 % in Australia today so that should be a good sign for POE.V tomorrow.
I built a 5 year financial model of POE's Thailand operations. Over that period, I assumed 6 wells would be drilled per quarter at a cost of $800,000 each. All dollars are US. Well decline rates are similar to those used by Hartley's. See the Carnavon web site. Others inputs are an average crude oil price of $80, operating costs of $7 a barrel, transportation of $2 a barrel and royalties of 6.5 %. All cash flows are before tax. I have fully expensed the drilling costs (i.e. a cash outflow) in the quarter incurred. The two major cash flow drivers of the model are the drilling success rate and the average initial production of a successful well. I modelled drilling success ratios of 40 %, 60 % and 80 %. I modelled initial production from successful wells at 1000 bopd, 1500 bopd and 2000 bopd. At the current price of $10.38 (Friday's close), the current price to end of 5th year annualized cash flows ranges from 1.26 (i.e. the current price is 1.26 times the annualized before tax future cash flows) to 0.31!! The 1.26 of course corresponds with the most conservative assumptions (i.e. 40 % success rate with successful wells commencing production at 1,000 bopd). I personally believe an 80 % success rate with an initial average production of 2000 bopd is more likely and if true that means that POE is selling for 31 % of the annualized before tax cash flows likely to be earned at the end of year 5. If instead of 31 %, POE were selling for 5 times the annualized before tax cash flows, then it would be selling for about $167 a share (i.e. (5.00/.31) x $10.38). While all of this sounds wildly speculative, drilling success rates are currently very high and initial production rates as reported (1265, 1480, and 1920) have all been chocked back with comments that management believes these wells are capable of much higher initial production than reported and in many cases wells have been drilled through multiple pay zones and only one zone per well has been tested which of course means even greater production or more prolonged production from each well.
POE.V TABLE POUNDER!
A few weeks ago this company did not qualify for this board. They are drilling "gushers" in Thailand after applying new 3D seismic to known vocanic formations. The typical wells were 500bpd, but by drilling deaper POE just reported a single well at 4,000bpd. They are drilling 30 m0re wells in '08 and I feel the limiting factor will be trucking and refining the oil. This should be a 10 bagger within a year or so.
Here is the news today:
Deviated well L44H-D1 is flowing at a sustained, stabilized rate of approximately 3,940 barrels per day of 35.5 degree API oil with a water cut of 0.05%. The well is free flowing through casing and tubing with restricted choke setting of 38/64" and 26/64" respectively. Flowing wellhead pressures on casing and tubing remain high at 280-285 psi. Load out of oil tankers from the well location is the determining factor in not taking production higher at this stage.
Pan Orient has been informed by the Thailand Department of Mineral Fuels that this is the highest flow rate ever achieved by any oil well drilled onshore Thailand.
L44H-D1 reached a total measured depth ("MD") of 1,217 meters, 866 meters true vertical depth ("TVD"), at a subsurface location approximately 700 meters north of the oil producing L44-H well location within the central fault compartment of the NSE field. The top of the main volcanic was penetrated at a depth of approximately 1,016 meters MD (755 meters TVD) with over 200 meters measured thickness (111 meters true thickness) of the target volcanic reservoir penetrated. The drill bit was still within the main target volcanic reservoir when the decision was made to call total depth on the well. L44H-D1 is the structurally highest volcanic reservoir penetration within the NSE field encountered to date. Total drilling fluid losses of 9,385 bbls at rates of 100 to 260 bbls/hr were observed while drilling through the main target. Wiper trips at 1,155 meters MD and 1,217 meters MD had resulted in oil to surface. This was the third well drilled into NSE's central fault compartment.
These test results at L44H-D1 confirm an oil column at Na Sanun East ("NSE") of a minimum of 150 meters.
Looking forward, the implications of this well on NSE field development are significant. L44H-D1 was a highly deviated well (approximately 51 degrees) at the time it intersected the top of the main volcanic objective. Based on these results, consideration is being given to full NSE field development utilizing up to 12 horizontal wells, the potential advantages being: 1) maximum reservoir thickness penetration 2) improved access to the extensive fracture network 3) less drawdown at higher rates, and 4) greater distance between the well bore and the oil/water contact, likely reducing the time to water breakthrough.
NS6-D1A Sidetrack (60% WI & Operator)
Sidetracked well, NS6-D1A is free flowing 35.5 API oil at a stabilized pre-cleanup rate of 615 bopd with choke setting of 18/64" on both casing and tubing. Flowing wellhead pressures are between 150 and 120 psi and water cut is approximately 0.05%.
NS6-D1A is located within the south fault compartment of the NSE structural closure approximately 400 meters north of the original POE-9 discovery well. The well penetrated approximately 23 meters of the main volcanic target with mud losses at rates of 20 bbl/hr. This was the fifth well drilled into NSE's southern fault compartment.
WICHIAN BURI-1 "DEEP" (60% WI & Operator)
The Aztec #14 rig is drilling ahead at a depth of 900 meters after setting 9 5/8" casing at 362 meters. Drilling is anticipated to take approximately 8 days to reach total depth.
WB-1 (Deep) is targeting an approximately 220 meter thick volcanic at a depth of 1,503 meters. This interval was penetrated by the original WB-1 well in 1988, resulting in severe lost circulation with approximately 20,000 bbls of drilling fluid losses that were associated with very high mud gas readings while drilling through the potential volcanic reservoir. Subsequent sidewall cores taken over this interval indicated oil staining. This deeper volcanic zone was never properly evaluated by the earlier operator as the shallower, conventional F sandstone reservoir tested oil at 500 bopd.
Outlook
Current field production capacity is now greater than 10,000 bopd gross (6,000 bopd net to Pan Orient) with average deliveries to the refinery of between 5,500-6,000 bopd gross (3,300-3,600 bopd net), limited by the capacity of the tanker fleet. Delivery is anticipated to increase to 7,000 bopd gross (4,200 bopd net) in late December 2007. The use of a new loading bay at the existing refinery has been negotiated, bringing the refinery capacity up to approximately 10,000 bopd gross. Upon approval of the NSE production license by the Thailand Department of Mineral Fuels, a second refinery contract is anticipated to be signed, bringing the total refinery unloading capacity to over 20,000 bopd gross.
Pan Orient Thailand management continue working on a number of options to reduce the trucking capacity choke point as quickly as possible. This is a short term issue caused by well deliverabilities far in excess of initial expectations.
POE YAHOOO GUSHER!!!!
Thanks NUTS!!
It's going to be a green X-mas!
Kipp
MSGI - I remember having this debate with Len and others years ago either here or on RB. I think I came away thinking the same thing. It was a great tool to measure direction, but not too good on exact prices. I look at P&F target along with everything else on those other charts. In the long run, nothing has worked better for me than growing top and bottom lines, quarter, after quarter, after quarter. CXPO, TXCO, and POE.V are all doing that, even if oil goes to $70 - or even $65/bbl.
Kipp
KCL Pump
http://www.tradingmarkets.com/.site/news/Stock%20News/898833/
Not sure I like to see the pumpers on this one.
Kipp
Guy - Do you have the chart from last year??? It would be cool to see how things turned out.
Kipp
MSGI - P&F Tracking on CXPO, POE.V, TXCO
CXPO at $14 - P&F target $31.50
http://stockcharts.com/charts/gallery.html?CXPO
POE.V at $10.65 P&F target $25.25
http://stockcharts.com/charts/gallery.html?POE.V
TXCO at $12.60 P&F target $25.50
http://stockcharts.com/charts/gallery.html?TXCO
These are my 3 oil/gas holdings and I would be THRILLED with the P&F targets! What would you say the timeframes are. 2-3 quarters?
Kipp
CXPO Charts including P&F
http://stockcharts.com/charts/gallery.html?CXPO
KCL - Published Report
I found the answers to some qustions and some maps in this report. Has anyone read this thing from cover to cover yet?
http://www.isxresources.com/i/pdf/TechnicalReport20070208.pdf
Kipp
KCL Potash Property
I found this arial shot of the Mosaic Belle Plain mine. It was owned by Kalium.
http://wikimapia.org/2858608/Belle_Plaine_potash_mine
I see a river to the north and west and a lake too. I wonder how the property lines would layout based on the map from the ISX/KCL website.
I am sure we have a long way to go on this story. There will be some wild swings based on the amount of dilution and PPs along the way. The price of potash was $80/ton forever, now in the mid $350's everything is different.
Kipp
AOS - There is hope! I am holding this one for the Don Coxe long term, stable country, reserves in the ground. Even though the Alberta tax deal was a stinker there is real long term value in holding barrels of bitumen that are priced under $.40/bbl.
Good Luck Bob!
Kipp
Mosaic Belle Plain Potash Mine is the one right next to the KCL deposit. There are a few slides in this presentation from Mosaic. Look at Belle Plain production, expansion plans, and the rocketing price of potash from $120 to $350ish in a year!
http://library.corporate-ir.net/library/70/704/70455/items/271906/MosiacCitigroupConfDec07.pdf
Kipp
Athabasca Potash IPO Coming.
I found this company today. I have done no DD. Kipp
Athabasca Potash Inc. ("Athabasca") announced today that it has entered into an underwriting agreement and has filed its final prospectus with the securities regulatory authorities in each of the provinces and territories of Canada, other than Quebec, in connection with an initial public offering of 10,140,000 common shares of Athabasca at a price of Cdn.$4.25 per share, for gross proceeds of Cdn.$43,095,000. Closing is scheduled to take place on December 13, 2007.
In addition, Athabasca has granted to the underwriters an option to purchase up to an additional 1,521,000 common shares on the same terms as set out above to cover over-allotments, if any, and for market stabilization purposes.
Genuity Capital Markets and National Bank Financial Inc. are co-lead underwriters for the offering. The other members of the syndicate are TD Securities Inc., Wellington West Capital Markets Inc. and Research Capital Corporation.
Athabasca has received conditional approval for the listing of its common shares on the Toronto Stock Exchange under the symbol "API". Listing is subject to Athabasca fulfilling all of the requirements of the Toronto Stock Exchange on or before March 4, 2008, including distribution of the common shares to a minimum number of public shareholders.
This press release does not constitute an offer of the securities described herein in any jurisdiction. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state and may not be offered or sold in the United States absent an exemption from registration.
About Athabasca
Athabasca is a company actively engaged in the exploration of potash projects in Saskatchewan, Canada. Athabasca's objectives are to establish itself as the pre-eminent Canadian public company engaged solely in potash exploration and development, and to provide its shareholders with a unique investment opportunity focused entirely on potash. Athabasca is actively exploring its wholly-owned Burr Project and recently completed a 2D seismic survey of the project as well as five new exploration drill holes. Following completion of its initial public offering, Athabasca will proceed with further seismic surveys, drilling, a scoping study and, if results warrant, a preliminary feasibility study to assess the viability of underground potash mining on the Burr Project. Athabasca also plans to conduct exploration programs over some of the ten exploration permits it holds in Saskatchewan in addition to the Burr Project.
The directors of Athabasca are Mr. Kenneth E. MacNeill, Dawn Zhou, Gary L. Billingsley, James G. Gardiner, Dr. Edward A. Schiller, and John King Burns. Dawn Zhou is also the President and Chief Executive Officer of Athabasca and Gary Billingsley is its Chief Financial Officer.
Email: info@athabascapotash.ca