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'Green' stocks lose fans
Investors place bets
on renewable energy with added caution
June 18, 2008
pippen er gået ud for at 'shoppe'
ZURICH -- Even as oil trades near record levels, shares of renewable-energy companies are far from a sure bet.
Stocks of companies that generate electricity from solar or wind power -- or make the equipment to do so -- soared during the last three years. But the global credit crunch, higher prices for raw materials like polysilicon used in solar panels, and cuts in government subsidies to consumers, such as in Germany last month, have made investors much warier. High oil prices, analysts say, can't compensate for all that.
"Some months ago, it was still true that a rising tide lifts all the boats," said Thomas Germann, an analyst at Zuercher Kantonalbank. "But investors are now scrutinizing what's going on at the company level, because cost efficiency has become more important."
A proxy for the changing sentiment is Conergy, a German solar and wind company that was long a sector darling. But it posted a large net loss last year as it struggled with soaring costs. Investors question whether it can return to profitability as promised next year. The stock has plunged 71% since problems were disclosed Oct. 26.
Such news has sobered the anything-goes mood reminiscent of the Internet boom. That's reflected in the lackluster showing of two recent large initial public offerings.
Last year's IPO for €4.1 billion ($6.35 billion) by profitable wind-energy producer Iberdrola Renovables SA, a unit of Spanish Iberdrola SA, is down 15% from its €5.3 offering price. Some analysts say the problem is that the stock was too pricey to begin with, and even now trades around 40 times expected earnings. Some say the company is too similar to traditional utilities that trade on much lower multiples.
Investors skeptical about the ability to contain costs gave a cold shoulder to Energias de Portugal's wind-energy division, EDP Renovaveis, which raised €1.6 billion earlier this month. Shares closed Tuesday at €7.88, down from the €8 IPO price. EDP Renovaveis earned €4 million on revenue of €339 million.
"The easy money has been made," said Jean Ryan, who oversees three funds with about €2 billion in assets at KBC Asset Management International Ltd., a unit of Belgium-based KBC Group NV.
The next test for the sector could be initial public offerings for SMA Solar Technology AG, a solar-energy control-system producer, and Sinosol AG, a German-Chinese developer of turnkey solar parks, which want to list in Frankfurt. SMA Solar posted sales of €330 million in 2007 and a net profit of about €40 million. The smaller Sinosol earned €2.2 million in pretax profit for the six months through March 31 on sales of €35.6 million.
"SMA Solar is profitable and big enough to make it," said Pius Gasser, managing director of Swiss financing company Phoenix Capital Ltd. and one who intends to seek shares in the company. "At a later stage, smaller companies such as Sinosol could be interesting, as well as they could become takeover targets."
Some say the recent selloff has opened up opportunities. Fund managers say valuations for the sector generally now seem reasonable, as shares trade between 20 and 30 times expected 2008 earnings, rather than around 80, as was the case last year. Vestas, the world's largest and most profitable wind producer with €4.8 billion in sales in 2007, has a price-earnings ratio of 32.7. The stock has gained 25% this year.
Another support could be takeover hopes. Robert Bosch GmbH earlier this month said it would spend €1.08 billion to buy Ersol Solar Energy AG, which makes solar cells. The price represents a 63% premium to the closing stock price just before the bid was announced.
Landing business helps, too. Gamesa has jumped 11% in the three days since it announced a €6.3 billion deal to provide wind turbines, construction and services to Iberdrola Renovables. It is the largest wind-turbines deal ever.
Ms. Ryan, the KBC investment specialist, prefers fast-growing companies that can capitalize on long-term trends of curbing carbon-dioxide emissions, improving waste management or limiting energy consumption. One of her picks is profitable German solar-cell producer Q-Cells AG, which has sales of about €900 million. The stock has plunged 25% so far this year.
But she also owns stocks of established firms such as Swiss engineering titan ABB Ltd., which profits from demand for products that enhance energy efficiency.
Thiemo Lang, fund manager at Sustainable Asset Management in Zurich, with €335 million under management, likes companies that supply other companies with components for their products. He says they have more pricing power.
Among the stocks he holds are Yingli Green Energy, which makes photovoltaic products and is listed in the U.S., SunPower Corp., the largest North American solar company by sales and traded on the Nasdaq Stock Market, and Q-Cells. Yingli has plunged 49% this year, and SunPower has dropped 36%.
"After the market weakness earlier this year, renewables are in demand again," he said. "But we won't see the price spikes of the past."
nå, det var den samme vi havde i kikkerten
den her i england laver bølgeteknologi
men den steg også 1000% i begyndelsen af 2007
så den skal nok købes, når der er ebbe
http://finance.yahoo.com/q/bc?s=OPT.L&t=5y
2 meget billige olieaktier med pe på 6 og 8 i 08 1q
GSVI.OB og TVOC.OB
comments?
og man skal huske hvor meget olie og gasprisen allerede er steget yderligere i 2q fra 1q, så det er den rene foræring
vaalco og interoil har jeg da en del i og de er steget pænt i længere tid og jeg har endda gevinst på dem
http://finance.yahoo.com/q/bc?s=EGY&t=5d
nej, jeg fik nok, da både frege og agenten gik til angreb uden at jeg havde sagt andet end at jeg ikke ville skrive
og de fortalte jo tydeligt hvor stor en idiot jeg er, der skræmmer alle de andre væk med min 'stil' og at jeg ikke kan tåle at blive sagt imod
så det med at skræmme de andre væk er da lykkedes
og så måtte man hverken skrive på engelsk, eller skrive om andet end danmark og så ikke engang copy paste og jeg dominerede debatten for meget så de andre ikke kunne 'komme til'
de ligger som de har redt
og vi har det fint her på ihup, danmarks eneste seriøse aktiedebat forum
jeg var lige inde at kigge på ei, mage til en omgang sludder skal man da lede længe efter, ingen røde tråde nogen steder
pippen synes markedet i usa ser for trist ud, så hun tager snart på natklub
hun kan bare ikke forstå, at det stadig er lyst udenfor, for det er sjovest at være på natklub, når det er mørkt
pippen holder altid fri, når markedet falder
så går hun i magasin og køber læbestift, neglelak og fine smykker for de penge hun regner med at tjene dagen efter
så for hende går det kun fremad og aldrig tilbage
Last week, there was some unusual trading activity in Oilsands Quest Inc. (BQI) and BQI call options, which leads me to believe that something is brewing at BQI. First, on Thursday, the volume and open interest on the BQI Oct $7.50 calls increased significantly, as referenced in the Seeking Alpha article titled "Thursday Options Outlook: XLF, LEH, BUD, CMI, TXN, CHK, KEY, FTO, BQI". Currently, the open interest on those options stands at 10,169 contracts, up significantly from less than 2,000 contracts only a few days ago.
And on Friday, BQI traded up by 13.9%, or $0.66 to $5.40 on trading volume which was significantly higher that normal. Specifically, volume for the day totaled 7.3 million shares, 2.8x the average daily volume of 2.6 million shares.
The Backstory on BQI
A few years ago, the bear case on the stock was that the company's acreage didn't contain meaningful amounts of bitumen and, if it did, the company wouldn't be able to produce it. Since then, the company has drilled 264 wells which have proven that its Axe Lake acreage has 1.3 billion barrels of bitumen. Moreover, the company has drilled 85 other wells and has shot 1,847 km of seismic data, which has led the company to believe that it has a total over 10 billion barrels on its acreage.
The current bear case on BQI is hinged on the assumption that the company cannot produce meaningful amounts of its bitumen, given the geologic characteristics of its acreage. This seems to be the only real concern remaining. However, that concern may soon be eliminated. BQI is currently constructing the 1st phase of its reservoir test program at its Axe Lake project. First steam injection is expected to take place by late summer, the results of which should de-risk the BQI story and eliminate the overhang on the stock.
The short interest in BQI currently stands at 13.1 million shares, which equates to 7.3% of the float and a short interest ratio of 5.4 days. I would expect that, as the test data is released, the short case on BQI could fall apart and that Shorts on the stock will start to cover in a hurry. Perhaps more significant, BQI will likely garner more support from institutional investors, who have been gradually warming up to BQI's story.
Over the last month, institutional ownership has increased to an all-time high of 47%. That figure will likely increase in light of the heavy volume exhibited on Friday and the further de-risking of the BQI story over the remainder of the year. Over the next 6 months, the company is expected by many to secure a joint venture with a Big Oil company. That should provide the company with the capital it requires to continue and/or accelerate development of its acreage.
Perhaps more important, that should make transparent the value which a Big Oil company is willing to ascribe to BQI. With oil prices hovering near record highs, the attractiveness of resource-rich companies like BQI should increase. And it shouldn't be long before it becomes apparent what's brewing at BQI.
pippen synes da det er et gevaldigt bull marked vi har fået i dag i europa
hun kan ikke forstå at folk er så kede af det
og alle hendes aktier stiger
hun regner da med at have tjent 100% når vi kommer til jul
og til påske så kan hun slet ikke tælle stigningerne mere
hendes lille tabel stopper ved 100
Teck expects record copper, coal profits in coming year
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By: Liezel Hill
Published on 22nd April 2008
Diversified Canadian miner Teck Cominco expects earnings from its copper and coal businesses will rise to their highest levels ever in the next year, as demand from China and other emerging economies continues at a galloping pace.
CEO Don Lindsay said that he did not expect a falling off in demand, despite the prospect of an economic slowdown in the US, and that the global supply of most commodites was likely to miss forecasts.
“There's more than a reasonable chance that ...our copper and coal businesses alone will generate record earnings for Teck Cominco ...so the next 12 months look pretty good,” Lindsay said on Tuesday.
“Generally, we think that supply will be tighter than people forecasting, and demand will carry on.”
The copper price, which recently topped a record $4/lb, had had a “considerable impact” on the group's earnings during the first quarter, Lindsay said on a conference call.
“Operating profit in the first quarter of 2008 was driven by the strength of our copper division,” he commented.
The company has increased its exposure to the metal - with copper contributing 70% of first-quarter operating profit, compared with 47% a year ago - and will continue to do so as it expands mines and builds new ones, CFO Ron Millos said.
Teck Cominco announced last week that it would buy the Relincho copper/molybdenum project, in Chile, from fellow Canadian Global Copper, increasing the group's measured and indicated copper resources by about 25% on a contained copper basis.
The Relincho project was "very doable...very buildable", Lindsay said, as it was located at a relatively low altitude and near existing infrastructure.
Besides Relincho, Teck Cominco has two other large-scale greenfield copper projects in the pipeline – the Galore Creek copper/gold project, in British Columbia, Canada, and the Petaquilla project in Panama, where it agreed last month to exercise its right to buy a 26% stake.
Lindsay said that, at Galore Creek, where Teck and its partner NovaGold halted construction in November because of skyrocketing costs, he was “very pleased” with the results to date of a review of plans to develop the mine.
“Design models they are working on now I think are a much better way to go... the decisions we've made have been the right ones for the benefit of the project long term,” he said.
The company expects to be in a position to make further announcements on Galore Creek in September.
COAL
Realised coal prices were expected to rise over the next 12 months, as higher contract prices, which are negotiated for the year beginning April 1, take effect.
Teck still had not made a decision on whether it would change its holding in Fording Canadian Coal or the Elk Valley Coal partnership.
The group increased its stake in Fording to about 20% in September last year, bringing its effective interest in metallurgical coal miner Elk Valley to around 52%.
Fording, which owns 60% of Elk Valley, said in December that it was considering “strategic options”, which could include the sale of assets or putting the trust itself up for sale.
It has made no announcements since, except to say that the process is “ongoing”.
“At this point its very difficult to to say what we would do. We could be a buyer, we could be a seller or we could hold our current position,” Lindsay said on Monday.
“No decision has been made at this point.”
CURRENCY, ZINC KNOCK EARNINGS
Teck Cominco shares fell 1,88% on Tuesday, to C$47,37 a share by 14:16, after the firm reported net earnings of C$345-million for the first quarter, compared with C$360-million a year earlier.
Profit was affected by a 17% increase in the value of the Canadian dollar versus the US currency, as well as zinc prices, which were 30% lower in US dollar terms and 40% lower in Canadian dollar terms.
However, operating profit from the group's copper division rose to C$435-million in the quarter, compared with C$292-million in the first quarter of 2007.
The increase in profit was primarily a result of higher copper prices and the acquisition of the Quebrada Blanca, Andacollo and Duck Pond mines in August 2007, the firm said.
Editor: Liezel Hill
uregistrerede biler i afrika bruger også olie, og det er sikkert importerede brugte biler, man så har undladt at registrere, hvor man så end har fået nummerpladerne fra
There are 9,2-million vehicles registered in South Africa, says Automobile Association (AA) public affairs manager Gary Ronald, with "around four-million unregistered vehicles on top of that".
The country had a registered vehicle population of 6,7-million by the end of March 2000.
By the end of March this year, Gauteng - the economic powerhouse of the country - had a registered vehicle population of 3,5-million. In contrast to this the province had a "mere" 2,5-million registered vehicles by the end of March 2000, says Ronald.
This means the number of registered vehicles in South Africa increased by 2,5-million vehicles from 2000 to 2008, with one-million (or 40%) of these finding a parking space in Gauteng.
Gauteng fuel sales have also increased significantly from 2000 to 2008, says Ronald.
By the end of January 2000, petrol sales in Gauteng reached 282-million litres of petrol for the month, and 52-million litres of diesel.
However, by the end of January 2008, Gauteng fuel sales have jumped to 319-million litres of petrol for the month, and 120-million litres of diesel.
Ronald says he expects the rising cost of fuel to stimulate demand for "viable, safe public transport systems".
afrika - råvaredrevet boom - Potash prices 'nowhere near peak'
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By: Liezel Hill
Published on 11th June 2008
Saskatoon-based Potash Corp of Saskatchewan, the world's biggest producer of the fertiliser ingredient, expects that potash prices will continue to surge, underpinned by rising food prices and global food demand, CEO Bill Doyle said on Wednesday.
“We have a lot of pricing power...we are nowhere near peak pricing,” Doyle said, at a conference in Toronto hosted by RBC Capital Markets.
Potash Corp is spending $4,5-billion to boost output from 10,2-million tons this year, to 15,7-million tons in 2012, and then to 17,2-million tons by 2015, Doyle said.
“The next five years will be the greatest period of growth in the history of the company, without question.”
Prices for potash have surged over the last year, driven by rising grain and food prices.
“We certainly aren't seeing any demand destruction,” Doyle added.
Going forward, “you are going to see higher grain prices not lower grain prices, and with higher grain prices, you are going to continue to see a very significant payback for fertiliser,” he said.
Demand from Brazil, India and China, in particular, would drive fertiliser prices upwards.
“There's a tremendous payback, we have a lot of pricing power.”
NEW SUPPLY
Despite the favourable market conditions, new sources of supply are few and far between.
The biggest barrier to entry into the potash industry, Doyle says, is the lengthy lead times from discovery to production.
He is also less than impressed with the influx of minnows and hopefuls into the potash space, especially companies claiming they are in a position to bring a mine into production within two or three years.
“I find it somewhat humorous...it's like the gold rush right now in Saskatchewan.”
Saskatchewan produces about a third of the world's potash, but it has been decades since a new potash mine opened in the province.
Still, Potash Corp hasn't taken new mines off the table.
“When it comes to greenfield economics...clearly, Potash Corp has its eye on that timing, and of course, we've got property that we've already well prepared,” Doyle said on Wednesday.
“So we're going to be able, when that time comes, to do it faster than anybody else anyway.”
Potash Corp shares gained 1,17% on Wednesday, to C$227,52 apiece by 15:48 in Toronto.
..........
The International Monetary Fund (IMF) set an expected gross domestic product (GDP) growth rate of 6,5% for sub-Saharan Africa for 2008, at its regional economic outlook presentation on Friday.
It also said that advanced economies would be most affected by the current economic turbulence, while emerging markets would continue to grow at rates above the trend.
Global growth for 2008 was expected at 3,7%.
Emerging markets would not, however, remain unscathed from global turbulence. Even though the growth of emerging markets would continue to be higher, it was likely that they would still be affected by the prevailing global shocks, although it was hoped that, with the achieved improvements in stability and monetary policy, they would be better equipped to deal with crises.
Although advanced economies and emerging economies have diverged, they have not decoupled. In developing economies the growth rates for 2008 could move up to 7% or 8%, while the advanced economies' growth rates could slow to about 2%. The growth in Africa would be driven by oil exporting countries.
"We believe that the way to keep growth going forward strong, and also further enhance growth, is to enhance the role of the private sector. It depends on each country, what stage of development they are in, and what the need is, for instance, to support infrastructure," said IMF African department acting director Benedicte Vibe Christensen.
She added that if there was an urgent need for infrastructure, such as power for example, that could require a temporary increase in public expenditure in that specific sector. "But eventually, any growth has to take off from the private sector," Christensen affirmed.
She noted that the involvement of the public sector needed to be a combination, and said that "it is a balancing act from the government, so in times when the private sector takes off, to step back perhaps, but also if there are certain constraints, certain bottlenecks to growth, then to step in, and to ensure that the bottlenecks to private sector growth, are removed".
Interestingly, it was pointed out that private capital flows to sub-Saharan Africa have increased fivefold since 2000, and of this, South Africa was the largest recipient, getting some 18,2% of distribution inflows.
Increasing food prices were highlighted at the IMF presentation, and the panel felt that agricultural production in Africa had been neglected for many years in many areas, and it was "time to turn this around". Christensen emphasised that the long-term focus should be on increased agricultural production, which would require policy change.
In the short-term, temporary and targeted subsidies could help the most vulnerable, and countries should aim to put in place an efficient social safety net, as many social problems could arise from food shortages and increased prices.
The IMF stated that it stood ready to provide support in those countries where price shocks (oil and food in particular) were worst.
The IMF forecast that there would be a more marked easing of growth in Southern Africa, while in South Africa, growth was forecast below 4%, as the electricity crisis was constraining output growth.
.............
Nonoil commodities would remain crucial to Sub Saharan Africa's growth outcome, the International Monetary Fund (IMF) said on Friday, and estimated that for every 1% decline in global economic growth, sub-Saharan African growth would decline by about 0,5%.
At its regional economic outlook presentation, in Johannesburg, the IMF stated that if commodity prices went down, this could cause a "wedge" in growth, but this would not happen in 2008 as there was a lag, which would only affect sub-Saharan Africa's growth in 2009.
"A decline in nonfuel commodity prices of 10% could reduce sub-Saharan African gross domestic product (GDP) by roughly 1,5%," the IMF stated in its April 2008 report.
Much of the unprecedented growth in resource-rich Africa has been attributed to the commodity boom, which raised the question of whether or not this was sustainable considering the current global economic slowdown.
IMF African department policy adviser Andrew Berg remained positive and stated that "some of the policy reforms we have seen are not directly dependant on commodity booms, and should help [African countries] them sustain their way through this crisis".
He noted that there were some African countries, which had experienced growth without increased trade in commodities.
Berg said that it was hoped that there were underlying factors beyond commodity trade increases, such as "the conquering of macroeconomic stability, some opening of markets and trade liberalisation, financial liberalisation", were "finally paying off".
The IMF set an expected GDP growth rate of 6,5% for sub Saharan Africa for 2008, and the global growth rate at 3,7%.
Advanced economies would be most affected by the current economic turbulence, while emerging markets would continue to grow at rates above the trend, it stated.
.............
Global miner Rio Tinto dismissed concerns on Monday over a huge new African iron-ore project which is central to its defence against a $180-billion hostile bid from rival BHP Billiton
Rising global demand has turned rust-red iron ore into gold for Rio and other miners, with prices up sharply over the last half-decade, generating billions of dollars in extra profits.
"Iron ore is becoming an increasingly significant earner for the big diversified mining houses," Eagle Mining Research analyst Keith Goode said.
The Simandou project in Guinea, estimated to cost $6-billion, is one of several that Rio says is undervalued in BHP's all-share offer. But doubts about Simandou surfaced last week as it emerged that Guinea was querying a decree giving Rio access to the lode.
Rio said then that Guinea spelled out its concerns in a letter, but insisted the validity of a pact under which Rio held the concession was not under question.
Rio Chief Executive Tom Albanese said on Monday the issue involved only the availability of land, and stressed that Guinea remained very supportive of the project, earmarked to start in 2013.
In comments to reporters, Albanese reiterated his stance that Rio had plenty of room to grow on its own, countering BHP claims that a merger would streamline ore distribution and increase profits.
Albanese said Simandou was the world's largest known undeveloped iron ore province. Rio estimates it is sitting on 2,25-billion tons of ore in Guinea and could extract 70-million tons from the mine in its first year.
Albanese was talking to reporters after addressing a business lunch in Sydney where he argued Rio Tinto's defence against BHP's bid in front of nearly 1,000 bankers, business leaders, analysts and rival mining executives.
Rio says BHP's overture, pitched at 3,4 BHP shares for each Rio share, is too low given its pipeline of new projects and the profits it stands to make from booming markets such as China.
Rio's main markets would double over the next 15 years as demand balloons in line with rising urbanisation in developing countries, Albanese predicted.
"We remain confident that the medium- to long-term trend is for a sustained and substantial increase in demand for metals and resources," he said in his lunch address.
BHP Chief Executive Marius Kloppers last week told a meeting of high-wealth investors in Sydney that a marriage with Rio could better capture the markets of a fast-industrialising Asia.
Both companies mine millions of tonnes of iron ore a year and together would control more than a quarter of the world market.
SOVEREIGN FUNDS
Albanese also touched on the wider issue of foreign sovereign funds investing in Australian mining, which supplies much of Asia's iron ore, coal, nickel, gold, alumina and uranium.
He backed the Australian government's cautious approach to direct offshore investment at a time when the mining sector needs foreign money to dig more mines, build roads and hire more staff.
"I don't think Australia would want to miss out on this substantial opportunity by not taking advantage of the full breadth of global capital and global relationships that might be on offer in its own region," Albanese said.
"Most of us agree that unlocking the full force of Australia's mineral potential will require direct foreign investment."
Albanese refused to be drawn on the possible motivation behind a $14 billion buying spree of Rio's London-listed shares in February by Chinalco, giving the Chinese aluminium group and minority partner Alcoa Inc a 9 percent stake in Rio.
Editor: Reuters
............
The gold-mining industry had "fallen flat on its face" as far as return of capital to shareholders is concerned, says DRDGold CEO John Sayers .
Sayers, who delivered a keynote address to Terrapin's Africa Mining Congress 2008 in Johannesburg, says that an urge to grow both reserves and resources rather than to support existing operations is at the root of gold mining's failure as an investment
The former financial director of Nampak and Altron Limited wants gold-mining companies to be like normal business and avoid valuation parameters that do not work particularly well.
Sayers says that DRDGold's own debate with investors currently revolves fundamentally around the sustainability of the business and the ability to support and maintain existing operations and existing reserves and resources.
He says that the higher gold price has reinforced this standpoint, which makes the purchase of reserves and resources expensive.
The lack of focus on existing operations has resulted in failure to deliver and reduced output across the board, Sayers hypothesises.
Previous management's attempt to convert the medium-to-small DRDGold into a global mining company damaged the business and stripped out shareholder wealth.
The gold-mining sector's lack of delivery has resulted in investor disenchantment, as companies either merged expensively or took on significant debt in order to increase their reserves and resource bases.
"The classic example is the stampede into Papua New Guinea, which DRDGold was part of," Sayers concedes.
He says the difficulties of mining in Papua New Guinea was underestimated as was the impact of dollar-denominated costs of mining there.
"The entire sector has been a disappointment," Sayers reiterates, resulting in investors moving from gold-mining companies to diversified majors such as BHP Billiton.
That could be seen in South Africa's JSE index, which is underperforming the gold price.
DRDGold's attempt to go global in 2003 sucked cash off its balance sheet and resulted in South African operations being starved of capital expenditure.
DRDGold has enough cash to fund all existing projects, with the exception of the ERPM phase two project, for which it will have to raise between R8-billion and R6-billion. But that is still years away, when hopefully its market capitalisation would have moved beyond the current R2-billion-plus mark.
..........
To counter the global food crisis, Africa could triple or quadruple domestic production over two seasons through simple changes to agricultural practices, a United Nations food expert said on Monday.
In response to rising food prices, the continent must drop its reliance on food imports and learn to feed itself, said Mafa Chipeta, sub-regional coordinator for the U.N. Food and Agricultural Organisation (FAO) in east Africa.
"Within two seasons we can change (dependence on imports)," he told Reuters on the sidelines of the launch of a regional FAO conference in Nairobi, Kenya. "We can boost production by three or four times by making simple changes."
Governments should reduce fertiliser prices and introduce quality, high-yield seed varieties, he said.
Chipeta also argued more investment in irrigation and dismissed the need for high-tech solutions such as genetically modified organisms.
He said he hoped the week-long conference would produce "actionable decisions" for Africa's agricultural sector which employs about two-thirds of the continent's workforce.
"Africa imports about $25 billion worth of food and receives about a third of the world's food aid," he said. "The food crisis cannot be solved by the continuation of charity."
Opening the conference, Kenya's Agriculture Minister William Ruto said 46 percent of Africans were hungry.
"Agriculture-led development is fundamental to eradicating hunger, reducing poverty, generating economic growth and minimising the burden of food imports while opening the way to expansion of exports and employment opportunities," he said.
Mobido Traore, FAO assistant director general for Africa, said 20 years ago Africa was a net exporter of food.
However, whilst the urban population has expanded as people abandoned rural areas in search of employment, governments have not invested sufficiently in agricultural production and therefore become net food importers, he said.
Edited by: Reuters
East Africa's rapidly expanding economies unveiled spending plans geared to more growth, but the positive effect of increasing foreign and private investment will be dampened by food and fuel price inflation.
Tanzania, Uganda and Kenya on Wednesday presented budgets that increased spending on infrastructure but that also included grain imports and fertiliser subsidies to ward off food shortages in their largely agricultural economies.
"Growth looks like it will remain robust," said David Cowan, Africa Economist at Citigroup, but added that getting inflation rates back under control would be a challenge for the governments in the second half of this year.
"You'll see largely deteriorating terms of trade because the rising oil price will remain and they are running quite substantial current account deficits and there is still this issue of inflation in Kenya which is also starting to feature a little bit in Uganda."
Kenya's inflation has spiralled the fastest, deepening to 31.5 percent in May compared with Uganda's 11.2 percent and Tanzania's 9.1 percent, mainly on rising food prices.
Kenya has been hit by the inflation striking across the world, but a post-election crisis disrupted planting and forced farmers out of their homes in bouts of ethnic violence in January and February.
Like most on the continent, the three nations derive most of their income from agriculture but despite higher market prices, farmers will still struggle because of the cost of fertiliser, seeds and pesticides.
Tanzania is considering introducing an export tax on cereals.
GOING FOR GROWTH
Cowan said the outlook for the three was positive because foreign exchange reserves have picked up, domestic debt numbers remained relatively low and external debt positions improved.
"All three countries have tried to dovetail their budgets into their long-term plans," said Charles Muchene, country leader for PriceWaterhouseCoopers in Kenya.
Analysts generally attribute that to fiscal discipline and stable macroeconomic conditions in all three.
"They are all trying to preserve the resources that they've got and they are going for growth because growth is the only thing that will reduce unemployment."
Uganda and Tanzania have been talked of along with Zambia and Ghana as part of a new generation of African "frontier markets" emerging behind the established economies of South Africa, Nigeria and Kenya.
Both Tanzania and Uganda said they would rely less on foreign budgetary support, cutting it back to 34 percent and 30 percent from 42 percent and 38.7 percent respectively last year.
"The budget indicates a sign of maturity. We are now learning that dependency is risky and dangerous," Haji Semboja, an economist at the Economic Research Bureau at the University of Dar es Salaam, wrote in the private Citizen daily.
KENYA RISKS?
Kenya on the other hand announced a larger-than-anticipated $513.6 million sovereign bond to fund infrastructure expansion.
"This (bond) is subject to an improved rating from rating agencies -- which creates some uncertainty around timing," said Razia Khan, Africa economist at Standard Chartered Bank.
"The authorities are likely to take encouragement from the recent Safaricom IPO ... even though with a sovereign bond, one might argue that domestic political risk matters more."
The just-concluded share sale in Kenya's biggest mobile operator Safaricom was five times oversubscribed despite the crisis earlier in the year that killed 1,300 people and displaced 300,000 people.
Both Uganda and Kenya foresee slower economic growth in 2008 because of post-election violence in Kenya after the disputed re-election of President Mwai Kibaki. Landlocked Uganda suffered when the violence choked supplies of fuel and other commodities.
Uganda's growth prospects have been revised downwards to 8.1 percent from 8.9 percent previously and Kenya's is seen expanding at 4.5 percent in the worst-case scenario. Tanzania sees GDP growth of 7.8 percent in 2008 from 7.1 percent in 2007.
"If (Uganda's) slows to 8.1 percent, that's still pretty rapid growth, the second strongest in Africa after Angola," said Richard Segal, Africa fixed income strategist Renaissance Capital.
Edited by: Reuters
Chinese steelmakers led to BDI collapse last week
- 17 Jun 2008
According to China Securities Journal, the sudden suspending of iron ore ship chartering by the Chinese steelmakers resulted in iron ore shipping market nose diving last week with the freights for routes from Brazil and Australia saw largest percentage of drop recently.
According to a report issued by the communication section of Shanghai Shipping Exchange, the speculative charterers had involved in long term time charter and hectically drove up the Capesize carrier lease market a week before.
To deal with this, Chinese steelmakers cut off charter business for ore shipping from Australia and Brazil and led to an unexpected slump in the Capesize shipping market.
As reported, freight rates from Brazil and Australia to China dropped 14.89% and 31.53% respectively last week, daily rent for Capesize carriers in four trip basis time charter routes was USD 180,200 down by 22.97% BCI also dropped by 22.90%.
Sector Snap: Farm Equipment
Monday June 16, 1:14 pm ET
Shares of farm equipment cos. rise on optimism about long-term demand
NEW YORK (AP) -- Shares of farm equipment companies got a boost Monday after an analyst suggested long-term demand for agricultural equipment remains strong.
Wachovia Capital Markets analyst Andrew Casey said that based on recent checks with equipment dealers, North American demand for the machines continues to outpace supply and most manufactures are sold out for this year.
At the same time, the companies have been able to pass along rising steel and shipping costs to their customers and used equipment prices remain strong.
"In general, despite damaging short-term Midwest weather conditions, the long-term agricultural equipment outlook has strengthened," Casey wrote in a note to investors.
The analyst said that dealers remain confident that farmers will buy equipment as long as corn prices, which currently sit at about $7.32 per bushel, don't fall below the $5 to $6 per bushel range.
Casey upgraded Duluth, Ga.-based Agco Corp. to "Outperform" from "Market Perform" and boosted his valuation range to $63 to $66 from $60 to $63, citing a recent pull back in the company's share price and the long-term crop price outlook.
Not surprisingly, Agco posted some of the day's largest gains, surging $4.85, or 9.1 percent, to $58.36 in afternoon trading after peaking at $59 earlier in the day. Over the past 52 weeks, the company's shares have traded between $36.66 and $71.95, and are off 21 percent since the start of the year.
Casey also maintained his "Outperform" rating for Deere & Co. Its shares gained $2.89, or 3.7 percent, to $80.81 after reaching $81.22 earlier. Over the past 52 weeks Deere's shares have traded between $56.96 and $94.89.
Elsewhere in the sector, shares of CNH Global NV added $2.05, or 5.1 percent, to $42.55.
jeg tror hestepærer er bedre end hønselort
hestepærer er nemlig meget sjældne og ligger i klasse med guld og sølv
men pippen vil ikke have en hestepærekæde om halsen siger hun
en sjov aktie i singapore, der sælger sjældne akvariefisk fra asien til hele verden med tilhørende akvarier
fremgang i 08 1q og pe ca 10 efter langsomt kursfald, der jo alene skyldes markedet
men jeg tør ikke have den slags fisk, for jeg tror pippen spiser dem medens jeg er nede efter mad til mig selv og hende
pippen kan ikke se at der er noget sjovt ved aktier, der falder, uanset om de sælger sjældne fisk, semiconductors, fladskærme eller fladfisk eller andet, det er fladt altsammen siger hun og hun er også flad
http://finance.yahoo.com/q?s=552.SI
Saudis May Be Strapped for Oil, Close to Full Capacity
Monday June 16, 11:18 am ET
Saudi Arabia's pledge to boost oil production by 500,000 barrels per day may not be achievable, a source close to the Saudi oil industry told CNBC.com.
The New York Times reported on Saturday, citing unnamed analysts and oil traders briefed by Saudi officials, that the production increase was to be announced at a meeting of oil producing and consuming countries on June 22 in the port city of Jiddah to discuss ways of dealing with
soaring energy prices.|
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The increase would bring Saudi's oil production to 10 million barrels a day, the country's highest ever, according to reports by the New York Times and the Middle East Economic. Saudi Arabia is the world's largest oil-producing country.
But the country's ability to produce more than 9.45 million barrels a day of easily refined sweet crude is reliant on the newly-discovered Khursaniyah field, which is of yet not producing to its full capacity, a source close to the industry said.
The field was expected to start pumping oil in 2007, but only started producing in 2008 because of technical delays. And even then, it was expected to produce 500,000 barrels per day, but is currently producing just 300,000 barrels per day.
The plan is that Khursaniyah can raise its production by 200,000 barrels, but that would be the maximum, according to Saudi Aramco's annual report.
The Saudis are concerned that sustained high oil prices will eventually slacken the world's appetite for oil, affecting them in the long run.|
U.S. light, sweet crude (BIS: US@CL.1) for July delivery slipped below $135 a barrel in the Asian session Monday on the news that Saudi plans to raise production. London Brent crude (KRF - US: GB@IB.1) also traded down.
Crude prices have reached record highs, surpassing $139 a barrel on June 6 after surging nearly $11 in the biggest single-day price leap ever. Meanwhile, the average national price for a gallon of regular gas in the U.S. rose to a record $4.066 Friday, up from $4.06 a day earlier, according to AAA and the Oil Price Information Service.
-- Associated Press contributed to this article.
grå ulv tror den skal højere op, den mener ikke den er steget så meget endnu som IT aktierne i 1999-2000
CALGARY, Alberta (Reuters) - Contract oil driller Grey Wolf Inc (GW.A: Quote, Profile, Research, Stock Buzz) turned down Precision Drilling Trust's (PD_u.TO: Quote, Profile, Research, Stock Buzz) $1.6 billion unsolicited takeover bid on Thursday, opting to go forward with its own acquisition of Basic Energy Services Inc (BAS.N: Quote, Profile, Research, Stock Buzz) instead.
Grey Wolf said its board concluded that the Precision Drilling bid would not be better for the company than its deal with Basic. It said the merger agreement between Grey Wolf and Basic is still in effect.
Canada's Precision Drilling announced its $9 a share, cash and stock bid on Tuesday, saying Grey Wolf's assets would help it build its business in the United States.
But Grey Wolf had already agreed to buy Basic Energy Services in April, in a deal that would merge the two companies into a new entity still called Grey Wolf and majority-owned by Grey Wolf's shareholders.
That deal would combine Grey Wolf's land drilling rig fleet with Basic Energy's land-based well servicing equipment. The companies have also said the combined company would have more financial flexibility and could return $600 million in cash to its shareholder base.
Precision could not be immediately reached for comment. However John Tasdemir, an analyst with Tristone Capital, said the company, Canada's biggest drilling firm, may tweak its offer to persuade Grey Wolf to accept it.
"Precision just lobbed in a bid expecting Grey Wolf would come back and squeeze them for more," he said. "I think Precision will move a little bit but not too much."
Precision's offer included a cash component of up to one third of the value of the offer, and Tasdemir said the driller may increase that ratio to persuade Grey Wolf to accept it, or a slightly raised offer.
"I don't see it going much higher than $9.50 (per share),"
It Is Estimated That the Revenue Growth Rate of China's Construction Machinery Industry Will Be About 45% in 2008 and 38% in 2009
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Source: Business Wire
Publication date: April 30, 2008
Research and Markets (http://www.researchandmarkets.com/reports/c90358) has announced the addition of China Construction Machinery Industry Report, 2007-2008 to their offering.
According to the latest statistics of China Construction Machinery Association of CCMA, sales revenue of China construction machinery industry in 2007 reached above CNY210 billion, ranking the fourth place in the entire China machinery industry, ranking the second place in the world just after the United States of America. Its existing market share accounts for one sixth of the global total.
In 2007, China's import and export of construction machinery industry continued a roaring growth. According to statistics of General Administration of Customs, China's total trade volume of import and export of construction machinery reached US$13.64 billion, up 52.6% year on year. In which, import volume was US$4.94 billion, up 25.7% on year, and export volume was US$8.7 billion, up 73.5% on year, resulting in a trade surplus of US$3.76 billion.
China's construction machinery industry will maintain a rapid growth in 2008, in which product mix determines investment value. It is estimated that the revenue growth rate of China's construction machinery industry will be about 45% in 2008 and 38% in 2009. In the future development of China's construction machinery industry, the companies, which have advantages in product technology and product mix, will have outstanding investment value.
From the perspective of regional sales of construction machinery, provinces in central and west parts of China were on the top and the growth rates of sales in these regions were also the fastest. Based on industry development track in the past two years, we can draw the conclusion that the industry boom was non-linear and growth in booming period was beyond company's expectation. Sales growth of construction machinery is close related with its downstream industries, including real estate, railway construction and urban mass transit construction. In the process of rapid development of China's urbanization, demand of real estate industry and infrastructure construction for construction machinery is inevitably on the upward trend.
Key Chapters Include:
1. Overview of Construction Machinery Industry
2. Production, Sale and import & export of Construction Machinery Industry
3. Influences on Construction Machinery Industry
4. Risks of Construction Machinery Industry
5. Prospect of Construction Machinery Industry
6. Key Companies
Selected Charts
Growth of sales revenue of China construction machinery industry over years
Growth of sales revenue of China construction machinery industry by product, Jan.-Nov. 2007
Rapid growth of shovel loader export
Contrast of sales volume of key shovel loader enterprises, Jan.-Aug. 2008
Sales ranking of China top 14 shovel loader enterprises
Monthly sales of shovel loader, 2006-2007
Sales of shovel loader products, Jan.-Oct. 2007
Top five provinces of sales, Jan.-Oct. 2007
Faster growth of total sales volume of domestic shovel loader
Excavator Being the second of construction machinery sales volume
Contrast of excavator market share in Jan.-May and Jan.-Oct. 2007
Sales volume of China excavator, 2006-Jan.-Nov. 2007
Exports volume of China excavator, 2006-Jan.-Nov. 2007
Excavator sales by region, Jan.-Nov. 2007
Export proportion of Guangxi Liugong, 2005-1H2007
Sales volume of excavator
Operating expenses ratio and management expenses ratio
Main business revenue and profit over years
Growth rate of main business revenue and profit over years
Gross profit margin over years
Operating income, 2007 (unit: CNY10,000)
Business structure of Changsha Zoomlion, 1999-2009
Export proportion of Changsha Zoomlion, 2004-2010
Gradual perfection of Changsha Zoomlion in global sales distribution
Companies Mentioned:
-Shantui Construction Machinery Co., Ltd. (000680)
-Xiamen Engineering Machinery Co., Ltd. (600815)
-Sany Heavy Industry Co., Ltd (600031)
-Taiyuan Heavy Industry Co., Ltd. (600169)
-Guangxi Liugong Machinery Co., Ltd. (000528)
-Xuzhou Construction Machinery Science & Technology Co., Ltd (000425)
-Changsha Zoomlion Heavy Industry Science & Technology Development Co., Ltd (000157)
For more information visit http://www.researchandmarkets.com/reports/c90358
The collapse of a bridge in China has put the spotlight on the nation's many construction projects.
Experts paint a damning picture of the safety standards on such projects, particularly those in remote areas.
They are sometimes rushed - often leading to design or building flaws - in order to finish work on time, or even before expected completion dates.
A lack of properly trained workers also means plans are not always carried out to designers' wishes, experts say.
Tao Hongyi, China director for the bridge builder Dorman Long Technology, says standards vary across the country.
"Big projects in major cities are usually built to a high standard, but lesser projects in remote areas often slip under the radar," says Mr Tao, whose UK-based firm has built eight major bridges in China.
Part of the problem, he says, is China's desire to build infrastructure projects quickly, often to maintain economic growth.
"China is a country driven by dreams, so projects have to meet targets," he adds.
Stadiums for next year's Beijing Olympics, for example, are all on, or ahead, of schedule.
Corruption and skills shortage
Mr Tao says another problem is that big construction projects are controlled by politicians in China, not engineers.
China is a country driven by dreams, so projects have to meet targets
Tao Hongyi, Dorman Long Technology
"These local officials like to see projects delivered on time - it makes them look good," he says.
There is also a lack of skilled foremen, who are vital if design ideas are to be turned into reality by often low-skilled workers.
Corruption is also an issue in the construction industry.
A local party secretary was executed following the collapse of a pedestrian bridge in Sichuan Province in 1999, leading to the deaths of 40 people.
It was discovered that the politician had accepted a bribe from a childhood friend in exchange for a bridge-building contract.
Shoddy workmanship
A construction expert, quoted in the state-run China Daily, also criticises the industry.
Xiao Rucheng, secretary-general of the Institute of Bridge and Structural Engineering, says projects are now completed in ever-shorter time spans.
"In the past, designing a bridge needed at least one year, but now it usually takes one month," he said, speaking before the bridge collapse on Tuesday, in Fenghuang County in central China's Hunan Province.
"You even find bridge designers working overnight to finish the task," he adds.
Another problem, he says, is that many of China's 500,000 or so bridges were not built to withstand today's increasing traffic volumes.
"Many bridges were designed and built 20 years ago when designers did not predict the huge traffic flows today," he says.
The problems facing major construction projects in China in mirrored in smaller projects, such as housing developments.
One foreign architect working in Beijing says developers would rather use cheap, shoddy building materials rather than more durable, but expensive, products, even on high-end projects.
"Many buildings in Beijing will have to be torn down and rebuilt in 10 years or so because they've been built so badly," he says.
BEIJING, June 12 (Reuters) - Chinese annual inflation fell in May to 7.7 percent, bucking a global trend, as a year-long surge in food prices ebbed and producers held back from passing on sharply higher energy and raw material costs.
The drop will provide some relief to policy makers who have declared high inflation their main economic challenge, but economists ruled out a softening of the central bank's tight policy after it published strong money supply data for May.
Within the consumer price index (CPI), food inflation eased to 19.9 percent in the year to May from April's 22.1 percent pace, the National Bureau of Statistics said.
Non-food inflation nudged down to 1.7 percent from 1.8 percent even though figures on Wednesday showed factory gate prices rose at the fastest rate since late 2004.
"CPI inflation should continue to slow through the rest of the year, because pork prices have peaked, because China is not suffering from a rice shortage, because energy will remain highly subsidised, and because overcapacity limits the ability of most manufacturers to pass on higher raw material costs," said Andy Rothman, an economist at CLSA in Shanghai, in a note to clients.
The CPI reading confirmed a leak to Reuters on Tuesday and was below forecasts of a 7.9 percent rise.
Beijing is not alone in its struggle with inflation. From Europe to the Middle East and across much of Asia, governments are battling to tame the fastest price increases in years. Continued...
Property prices in 70 major Chinese cities rose 9.2 percent year-on-year in May, compared with 10.1 percent growth in April, the National Development and Reform Commission (NDRC) said.
In a statement published on its website, the central government's economic planning agency said the prices of new residential properties rose 10.2 percent year-on-year in May, down 0.6 percentage point from April's growth rate.
The cities where property price growth exceeded 15 percent year-on-year last month included Urumqi, Haikou, Ningbo, Beijing and Hangzhou with growth rates of 22.8 percent, 17.6 percent, 16.6 percent, 15.7 percent and 15.2 percent, respectively.
Prices of resale homes rose 8.8 percent year-on-year, 1.5 percentage point below the April growth rate.
Non-residential property prices grew 6.5 percent, down 0.4 percentage point from April.
Shenzhen housing market likely to slide further
Last Updated(Beijing Time):2008-06-13 09:15
Housing sales perked up in Shenzhen in May as prices continued to slide, but experts predict prices won't stop falling in the coming months.
The average housing price in Shenzhen's six districts dropped to 11,143 yuan (US$1,610.39) per square meter in May, down 23 percent from a year ago and 7 percent from April, according to a report released by Centaline (China) Shenzhen-Hong Kong Property Research Center on Tuesday. The average price in May was lower than that in February last year.
Of the six districts, Bao'an recorded the biggest fall in May, with the average housing price reaching 10,418 yuan per square meter, down 7.3 percent from a month ago. The average housing price in Longgang District didn't slide as much as it did in April and fell only 2 percent from a month earlier to 8,910 yuan per square meter.
The report showed sales of new apartments rose quickly as more houses become affordable. In May, 4,732 houses were sold with a total floor area of 460,000 square meters, up 51 percent and 56 percent respectively from a month ago.
"Despite the rise in transactions, I'm not optimistic about Shenzhen's housing market in the near future," said Wang Shitai, brand manager of Sunstars Real Estate in Shenzhen.
"Developers will have to slash prices further in order to boost sales to maintain their businesses. Many have offered prices as low as 5,500 yuan per square meter in order to attract enough buyers."
China Overseas Property, a major real estate developer in Shenzhen, launched a new housing estate, Xi'an Huafu, in Bao'an District on May 31, with opening prices of 5,500 yuan per square meter, the lowest in the district this year. The developer launched another project, Kangcheng Guoji, in early June, and set the opening price at 4,988 yuan per square meter.
"Judging from the opening prices of these new housing estates, major real estate companies like China Overseas and China Vanke are pessimistic about the city's housing market," said Zhou Qu, a Centaline manager.
"Many developers now face huge financial pressure and housing prices will drop a bit further in the next two months as they launch a price war."
Zhou said the city's housing market wouldn't show signs of life until September or October when sales were expected to rise markedly.
In the past six months, with a tightening of the property market, Shenzhen's housing prices have dropped 30 percent from a year ago. This has become agony for investors, especially speculators.
Many well-off locals and investors from other cities who have been keen on speculative property trading said they could no longer afford to pay their mortgages as the houses they had bought couldn't be sold at high prices. Many were forced to sell the apartments much lower than the purchase prices in order to cut their losses.
"More investors are expected to stop paying the mortgages later this year and early next year because they simply can't afford it," said Guo Shiping, an economics professor at Shenzhen University. "Housing prices will slide further after the Beijing Olympics and banks will feel the pinch. The number of speculators who can not afford mortgages will peak next year."
Four major State banks in Shenzhen were reported to have broken the rules governing pre-owned house mortgages last month, granting loans at low interest rates. Many allowed homebuyers to pay only 20 percent of the total price as a down payment ---even when they were buying a second house ---instead of the 40 percent required by regulators.
"This is very risky, not only for the banks but also for the developers and investors," Guo said. "When prices drop further and more investors fail to pay the mortgages, all of them will suffer."
China saw commercial residential sales dip in the first four months this year while real estate investment in central and western regions outpaced that in the eastern part.
The area of residential buildings sold in the January-April period fell 4 percent year on year to 136.6 million square meters, compared with a 16.6-percent growth in the same period last year, said the National Development and Reform Commission (NDRC) on Friday.
Residential buyers had somewhat taken a wait-and-see attitude in the first quarter as housing price rises generally slowed down and transactions continued shrinking as a result of macro-control policies, according to an NDRC report published in April.
The NDRC, China's top economic planner, said the country completed the construction of 84.5 million square meters of commercial residential houses in the first four months, 20.2 percent up year on year.
Real estate investment soared 44.8 percent in central China and42.6 percent in western China, while the booming eastern areas posted a 26.1-percent growth.
In the period, the nation completed 695.2 billion yuan (99.3 billion U.S. dollars) of real estate investment in total, 32.1 percent up year on year and 4.7 percentage points higher.
IEA siger noget helt andet
Global oil product demand is expected to average 86.8 mb/d in 2008, 80 kb/d below last month’s estimate, following the reduction of price subsidies in several non-OECD countries. Global growth is cut even more steeply by 230 kb/d to +0.9% or +800 kb/d when historical upward revisions to 2006 and 2007 data are factored in.
Global oil supply rebounded by 490 kb/d in May to average 86.6 mb/d, lifted by higher OPEC crude supply. The rise however comes after extensive downward revisions to 1Q08 non-OPEC production and lower biofuels and NGLs for the rest of this year. Despite this, a recovery in non-OPEC output is forecast for the second half of 2008.
ifølge BP's seneste opgørelse af produktion og forbrug af energi fordelt på forskellige energikilder
er forbruget af olie kun steget 1.1% til 85 mbd, men produktionen er faldet marginalt med 0.X% til ca 81 mbd
så hvis man skal regne med de tal, der plejer at være grundlagdet for de fleste analyser af energimarkedet er det ikke så mærkeligt at olieforbruget ikke stiger mere og at olieprisen stiger så meget
når der produceres 4 mbd mindre end der forbruges ifølge BP og det var næsten det samme som året før
men tallene passer jo ikke sammen med IEA's udmeldinger
og viser bare at man ikke kan stole ret meget på statistikker
men man skal bruge sin egen intuition
forbruget er sikkert noget højere og det er produktionen nok også, men den er stadig betydeligt mindre end forbruget ifølge BP og forbruget kan jo af gode grunde ikke ligge over produktionen ret lang tid ad gangen
og BP chefen kom endda med en hånlig udtalelse om at der da var rigeligt med olie og at det bare var spekulation der havde drevet prisen op og al den snak om peak oil var noget vrøvl
og det er igen et eksempel på at den slags mennesker ikke læser deres egne statistikker, men bare snakker de andre efter munden
Argentina cracks down on farm blockade
Saturday June 14, 9:50 pm ET
By Vicente L. Panetta, Associated Press Writer
Argentine police break up highway blockade, briefly detain farm protesters
BUENOS AIRES, Argentina (AP) -- Argentine police in riot gear broke up a farmers' highway blockade Saturday, briefly arresting 19 demonstrators including a prominent leader of a three-month protest against an increase in grain export taxes.
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The arrests near the city of Gualeguaychu and Argentina's river border with Uruguay were broadcast on national television and threatened to inflame a tense standoff between farmers and President Cristina Fernandez's center-left government.
Strike leader Alfredo de Angeli and the other demonstrators were later freed following noisy protests in the capital demanding their release, including one protest outside the government house. Riot police brought in water tanks and monitored the demonstration, but there were no clashes in Buenos Aires.
"The government is not going to pacify us like this -- on the contrary. The protest will continue," de Angeli told Cronica TV after his release.
Cabinet chief Alberto Fernandez accused striking farmers of "generating a climate of growing public unrest." He said 19 people were arrested.
The crisis was touched off by the president's decision this spring to raise export taxes on grains more than 10 percent, saying farmers have benefited from rising world prices and the profits should be spread around to help poor Argentines.
Growers countered that they need to reinvest the profits and the higher taxes make it difficult for them to make a living.
Three months of bitter protests and road blockades have emptied supermarket shelves and led to shortages of meat, oil, flour, vegetables and fuel. Farm goods are the largest source of foreign currency in Argentina, which is the world's third biggest exporter of soy and corn.
President Fernandez has refused to repeal the tax increase and government officials have said they would guarantee free movement on roads across Argentina.
Border police in riot gear carrying batons were seen making the arrests and dragging away protesters.
"I believe they arrested us for blocking the road but nobody read us any charges," Juan Maya, one of the detained, told Maxima radio.
Interior Minister Florencio Randazzo denied police violently cracked down on protesters.
"There was no repression. The border police were not carrying guns or tear gas, just shields," he told cable channel TodoNoticias. "They were trying to clear the people who were on the road, and they resisted."
The farm strike has been joined by cargo truckers, who have been idled by three separate farm strikes that all but halted grain exports for weeks. They have vowed to protest, blocking about 200 roadways, until the farm strikes are resolved.
Plan Would Lift Saudi Oil Output to Highest Ever
June 14, 2008
Saudi Arabia, the world’s biggest oil exporter, is planning to increase its output next month by about a half-million barrels a day, according to analysts and oil traders who have been briefed by Saudi officials.
Susan Walsh/Associated Press
King Abdullah has called a meeting to address the causes of the oil price rally.
Related
Times Topics: Oil (Petroleum) and Gasoline
The increase could bring Saudi output to a production level of 10 million barrels a day, which, if sustained, would be the kingdom’s highest ever. The move was seen as a sign that the Saudis are becoming increasingly nervous about both the political and economic effect of high oil prices. In recent weeks, soaring fuel costs have incited demonstrations and protests from Italy to Indonesia.
Saudi Arabia is currently pumping 9.45 million barrels a day, which is an increase of about 300,000 barrels from last month.
While they are reaping record profits, the Saudis are concerned that today’s record prices might eventually damp economic growth and lead to lower oil demand, as is already happening in the United States and other developed countries. The current prices are also making alternative fuels more viable, threatening the long-term prospects of the oil-based economy.
President Bush visited Saudi Arabia twice this year, pleading with King Abdullah to step up production. While the Saudis resisted the calls then, arguing that the markets were well supplied, they seem to have since concluded that they needed to disrupt the momentum that has been building in commodity markets, sending prices higher.
The Saudi plans were disclosed in interviews with several oil traders and analysts who said that Saudi oil officials had privately conveyed their production plans recently to some traders and companies in the United States. The analysts declined to be identified so as not to be cut off from future information from the Saudis.
Last week, King Abdullah also took the unprecedented step of arranging on short notice a major gathering of oil producers and consumers to address the causes of the price rally. The meeting will be held on June 22 in the Red Sea town of Jeddah.
Oil prices have gained 40 percent this year, rising to nearly $140 a barrel in recent days and driving gasoline costs above $4 a gallon. Some analysts have predicted that prices could reach $200 a barrel this year as oil consumption continues to rise rapidly while supplies lag.
The growing volatility of the markets, including a record one-day gain of $10.75 a barrel last week, has persuaded the Saudis that they need to step in, analysts said.
Tony Fratto, a White House spokesman, said, “We would welcome any and all increases in oil production, including from Saudi Arabia.”
But the measure carries some risks to the kingdom and is not guaranteed to bring down prices, analysts said. Some investors doubt that Saudi Arabia has the capacity to increase its production beyond its current levels.
“This clearly represents the biggest test for them,” said John Kilduff, a senior vice president at the brokerage firm MF Global, who said the move could backfire if investors failed to respond to the extra Saudi supplies. No other producer has the capacity to quickly expand production.
Oil prices fell on Friday, slipping $1.88 to settle at $134.86 a barrel on the New York Mercantile Exchange, after reports of the prospective Saudi increase trickled into the market.
Ibrahim al-Muhanna, an adviser at the Saudi petroleum ministry, declined to comment on the production increase but said that Saudi Arabia was uncomfortable with oil prices. “Our goal is to bring back stability to the oil market,” he said.
Consumers are complaining that rising fuel prices are imposing a growing toll on their economies, and contributing to higher food costs. The Australian prime minister, Kevin Rudd, said this month that it was time “to apply the blowtorch to the OPEC organization.”
In Washington, bipartisan support is also growing to pass a law allowing the Justice Department to engage in antitrust proceedings against OPEC producers accused of curbing supplies to drive up prices.
Pressure is also mounting in consuming countries to address record energy prices. Congress is debating measures that would tackle speculators, whom many in Washington blame for driving up commodity prices.
When the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the most powerful member, met in March, it decided against increasing production, blaming speculators and a declining dollar, not a shortfall in supplies, for driving up oil prices.
Saudi Arabia’s unilateral policy could put it at odds with other members of the OPEC cartel. In a report from the group’s secretariat on Friday, OPEC analysts said they saw no need to put more oil on the market. “Claims that the recent surge in prices is due to a supply shortage are unjustified,” the report said.
Saudi Arabia is completing a huge expansion program in its oil industry that is expected to bring its production capacity to 12.5 million barrels a day by 2009. As part of that expansion, Saudi Aramco, the country’s national oil company, is planning to start soon an oil field, called Khursaniyah, with a daily production rate of 500,000 barrels.
The production increase, which would amount to less than 1 percent of global consumption, could be made public next week at the energy meeting, which is expected to bring together a large number of consuming and producing countries, including the United States, Russia, Britain, China, India and Japan.
While the meeting is not expected to achieve anything tangible, Saudi officials hope that tackling the issue publicly will break the upward momentum that is dominating oil markets.
“They’ve created pressure on themselves to make a concrete move at this meeting,” said Adam Robinson, an analyst at Lehman Brothers. “But when the king calls an oil summit, the markets would do well to take heed.”
Chavez Cuts Tax, Paperwork to Boost Economic Growth (Update1)
By Matthew Walter and Daniel Cancel
June 12 (Bloomberg) -- Venezuelan President Hugo Chavez eliminated a financial transactions tax and cut paperwork for some importers in a bid to jump-start growth and rein in Latin America's highest inflation rate.
The president also said he'll increase agricultural subsidies, help pay off debts owed by food producers and create a $1 billion fund to finance projects with the private sector to boost manufacturing and food production.
``This tax was causing inflation and we don't need it,'' the president said yesterday in comments broadcast by state television. ``We're going to continue pushing the economy forward.''
Economic growth in Venezuela, the biggest oil exporter in the Western Hemisphere, dropped to its lowest in more than four years in the first quarter as inflation accelerated to almost 30 percent. Government price and currency controls and a series of nationalizations have discouraged investment and restricted the supply of consumer goods and foods.
While cutting the financial tax may reduce annual inflation this year by about 1 percentage point, none of the other measures announced yesterday are likely to have an impact on growth and inflation, said Miguel Carpio, chief economist at Banco Federal CA in Caracas.
``You've got demand that's exceeding supply, and as long as that situation exists you're going to continue to have inflationary pressure,'' he said. ``We still have economic controls and enormous public spending.''
Development Fund
The 1.5 percent tax on financial transactions that's being eliminated was put in place in November. Chavez said he doesn't plan to create any new taxes for the rest of the year.
The government will direct $500 million from a new windfall tax on the oil industry passed earlier this year to the new $1 billion development fund announced yesterday, the president said. The other half of the money will come from a fund created with China.
New exchange control rules should also speed up the importing process, the president said. Companies that need to obtain dollars from the government-run Foreign Exchange Administration Commission for imports of capital goods and other items needed to increase productivity will be allowed to bypass paperwork.
The new rules, which Chavez said are ``experimental,'' only apply to companies seeking as much as $50,000. The president said he'll go back to the old system if he detects that companies are abusing the new plan.
``This is a new stage for our exchange controls,'' the president said.
Slowing Growth
Venezuela's economy grew 4.8 percent in the first quarter after expanding on average 12 percent during the previous four years.
The slowdown in growth was spread over almost all parts of the private sector. Manufacturing expanded 1.4 percent in the period, down from 6.8 percent in the same period a year earlier. The financial sector contracted 6.4 percent, after expanding 28.8 percent in the first quarter last year. Capital investment decreased 1.8 percent in the first quarter.
Venezuela's annual inflation rate, the highest in Latin America, reached a five-year peak in May, at 31.4 percent. Food inflation drove up the consumer price index last month, as the government increased regulated food prices in a bid to ease shortages of staples including milk and beans.
``In the announced plan, with the exception of the elimination of the financial transactions tax, fell somewhat short of expectations,'' Goldman Sachs Group Inc. economist Alberto Ramos wrote in a note to investors. ``It's unlikely to generate a significant impact either on the economy or on inflation.''
Government Budget Swells
Chavez said yesterday that, while the government is concerned about inflation indicators, he won't curb government spending to stabilize prices.
``We're not going to put the brakes on the economy,'' he said.
Venezuela has benefited from a more than 200 percent gain in oil prices since 2004, allowing Chavez to ramp up spending on education, health care and food programs for the poor, contributing to inflation.
The government's budget has grown more than sixfold since 2000. Chavez has also ordered the state oil company to start directly financing social programs.
The president is expected to announce a replacement for outgoing Finance Minister Rafael Isea this month. Policies put in place under Isea led to a 40 percent gain in the bolivar in the parallel, unregulated currency market to 3.4 per dollar. Venezuelans turn to the parallel currency market when they can't get permission from the government to buy dollars at the official rate of 2.15 per dollar.
``After the first-quarter growth figures, we've seen it's not enough to have high oil prices,'' said Asdrubal Oliveros, director of Caracas-based Ecoanalitica, in a telephone interview. ``Bad policies need to be corrected
The huge projected demand for cement needed for reconstruction following the Wenchuan earthquake is expected to strain supplies from sources in the neighboring areas.
Some supplies are likely to be shipped from other regions to meet the initial shortfall but the high cost of transportation would render that uneconomical in the longer term, industry experts said.
"It may take some time for Sichuan's cement producers to boost output, and during the interim, we may see some price increases," said Jiang Kongliang, a specialist on building materials at Haitong Securities in Shanghai.
Although none of the cement producers in Sichuan have been hit hard by the earthquake, stepping up production might be difficult given the nature of the industry.
One of the cement manufacturers located closest to the epicenter, Sichuan Golden Summit, sustained only minor damages to its production facilities, according to its public statement to the Shanghai Stock Exchange.
Golden Summit, one of the largest cement producers in the region, has an average yearly output of 2.3 million tons. Its output in 2007 totaled 1.9 million tons.
But even for a highly modernized manufacturer like Golden Summit, boosting capacity is a time-consuming task involving not only the expansion of the company's facilities but also external factors that are beyond its control.
"A cement manufacturer's output capacity is roughly fixed and will remain unchanged within a certain period of time because it's a time-consuming process to increase production as many factors, such as power supply and upstream resources, need to be considered before expanding production," said a manager at Golden Summit.
"It usually takes at least one year to build a new cement assembly line," he added.
Golden Summit confirmed the company has no plans to expand its production capacity.
Recent figures show cement sales in Sichuan province reached 62.14 million tons in 2007, accounting for 4.5 percent of the nation's total. Most of the demand in the province was met by supplies from regional producers, analysts said.
"The cost of transportation increases by 50 yuan with each additional 100 km in distance," said Luo Guo at Orient Securities. "That is to say, at the current price level, a cement producer can derive no profit for delivery to users located beyond 200 km from its factory."
Domestic price of Po42.5 cement in May averaged at 320 yuan per ton, up 3.8 percent from a month ago.
Because of high transportation cost, the projected demand for the reconstruction will unlikely be met by cement from around the country. For that reason again, any disruption in the price pattern would be limited only to the affected region.
Source: China Daily
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Cheer up, China! Cheer up, Wenchuan!
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China expects power shortages amid surging demand
+ - 08:24, June 03, 2008
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China could suffer electricity blackouts this summer in its eastern, southern, and central areas as demand rises ahead of supply, a senior official of the power regulator has warned.
Yu Yanshan, deputy head of the State Electricity Regulatory Commission (SERC) general office, said Guangdong Province would be short 5.5 million kilowatts, Guizhou 1 million kilowatts, and Yunnan 1.5 million kilowatts.
China experienced the fifth consecutive year of power shortagesin 2007.
Yu said the May 12 earthquake centered on Sichuan's Wenchuan county had affected power generation and distribution in these areas.
The quake also damaged some hydroelectric dams, Yu added.
According to Yu, a shortage of coal was also putting pressure on electricity generation. Coal reserves in some power plants were below the seven-day alarm level.
Coal shortfalls had hit some of the eastern and southern provinces, Anhui, Hunan and Hainan included, said Yu.
Thirty-five generating plants nationwide had stopped generating due to the lack of power coal, leading to a loss of capacity of 6.08 million kilowatts.
According to the SERC, the coal reserve in the country's big power plants is 43.81 million tonnes. This reserve can maintain normal production in 11 days.
Yu said the coal reserve in big generation plants in Sichuan Province had been basically restored thanks to the country's efforts to ensure coal supply and transportation in the wake of the May 12 earthquake.
Despite surging demand, an increase in coal prices would lead to a power deficit, which would add tens of millions of yuan to the costs of the domestic power plants, said market analysts.
Coke prices in most domestic markets rose by 300 yuan (43 U.S. dollars) per tonne on Sunday. The price adjustment put the coke price in Shanxi, the main coal producer, at 2,680 yuan per tonne in June.
MOC: domestic iron ore prices might go down in June
+ - 18:56, June 05, 2008
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Major fluctuations in commodity prices of iron ore gradually have given way to more stable, but slight gains, according to China's Ministry of Commerce (MOC).
The average price on the domestic market reached 1,530 yuan (218 U.S. dollars) per tonne by the end of May, up 2 percent from the beginning of the month.
The MOC estimated the price might drop with expanded supply. Domestic rude ore output was up 25 percent in the first four months to 235 million tonnes against the same period last year.
More than 78 million tonnes of iron ore is expected to be added to the international supply in 2008, easing the stressed demand-supply conflict, said analysts.
The huge iron ore stockpiles that filled up Chinese port yards would be reduced as Beijing more than doubled the inventory fee that would be charged for existing stocks in ports.
If the supply kept increasing this way and the freight cost went down, domestic prices for iron ore would go down, said the ministry.
forbruget fortsætter også og med en inflation på 8-9% er det nok ca 13%, et niveau, der har været gældende i en del år efterhånden og en real stigning i forbruget på 13% om året bliver til en del, når der er gået 10 år og ikke som hos os, hvor man jubler hvis man når over 2%
China recorded 870.4 billion yuan (124.3 billion U.S. dollars) in retail sales in May, a growth of 21.6 percent on the same month of last year, the National Bureau of Statistics said on Friday.
In the first five months of this year, the retail sales amounted to 4.24 trillion yuan, up 21.1 percent year-on-year.
bilsalget i kina fortsætter stigningstakten på ca +20% sammenlignet med sidste år, så de lige knapt 11 mio for 2008 bliver mere og mere sikre og husk nu, de kører ikke på vand endnu
China's motor vehicle sector realized a production against sales ratio of 97.82 percent in May. Both output and sales, however, declined month-on-month for the second consecutive month, the China Association of Automobile Manufacturers said on Thursday.
China produced 854,100 motor vehicles in May, down 12.96 percent from April but up 20.2 percent over the same month of last year. It sold 835,500 vehicles, down 9.44 percent month-on-month but up 17.04 percent year-on-year.
The total output included 591,400 passenger vehicles, down 10.2percent from the previous month but up 20.03 percent over a year earlier. The output of commercial vehicles was 262,700 units, down18.61 percent month-on-month but up 20.58 percent year-on-year.
The monthly sales included 564,600 passenger vehicles, down 6.66 percent from a month ago but up 15.59 percent over a year earlier. Monthly sales of commercial vehicles was 270,900, down 14.74 percent month-on-month but up 20.18 percent year-on-year.
May saw 434,700 cars produced and 415,200 cars sold nationwide, down 11.49 percent and 6.6 percent, respectively, from April
et fald fra 100 til 25, er der nogen der gerne vil have en billig aktie?, eller er den billig?
http://finance.yahoo.com/q?s=ZNH
China Southern's Net Jumps,
Aided by Yuan, Passenger Rise
By JEFFREY NG and ROSE YU
April 21, 2008; Page B2
SHANGHAI -- China Southern Airlines Co. said 2007 net profit surged more than eight times, helped by the yuan's appreciation and robust passenger growth.
Net profit for the year ended Dec. 31 rose to 1.85 billion yuan ($264.5 million), from 209 million yuan in 2006, based on Chinese accounting standards, the air carrier said. Based on international accounting standards, net totaled 1.87 billion yuan, up from 188 million yuan. Revenue rose 18% to 55.87 billion yuan from 47.26 billion yuan.
China Southern said it plans to sell four billion yuan of bills with a maturity of within one year on the domestic interbank bond market.
The Guangzhou-based airline said its board approved a proposal by its 60%-owned Xiamen Airlines to buy 20 Boeing B737 planes from Boeing Co. to increase its operating capacity. The Boeing planes have a combined list price of $1.5 billion, but the actual purchase price will be lower than the figure, China Southern said.
The planes will be delivered to Xiamen Airlines between April 2014 and October 2015, and Xiamen Airlines will use its own working capital and bank loans to fund the transaction.
"We believe the deal will better provide our passengers with premium services and strengthen the competitiveness of the company," China Southern added.
China Southern Airlines returned to a full-year net profit in 2006 after reporting full-year losses since 2003 as a result of surging fuel costs and increased domestic competition.
Analysts have said among China's three state carriers, China Southern is likely to benefit most from exchange gains as it has one of the largest U.S. dollar-denominated debt holdings in the sector.
In 2007, the Chinese yuan rose 7% against the U.S. dollar.
China Southern's 2007 passenger revenue, as measured by revenue passenger kilometers, rose 17.5% to 81.73 billion RPKs, exceeding a 13% rise in capacity, as measured in available seat kilometers. The airline transported 56.9 million passengers for the year, up 16% from 49.2 million in 2006.
interoil - en aktie med et kæmpe potentiale, gas i papa new guinea, anlæg til at omdanne gassen til flydende gas og station til at last det på skibe samt raffinaderi i PNG
Since the last time we wrote here about IOC a month ago (May 5), a lot has happened - apart from the share price rallying 30+%. A revisit is warranted. I think that a lot of uncertainty is being taken out as we speak, and the upside is now very, very significant.
Refinanced
The outstanding loan to Merrill Lynch and Clarion Finanz ($130M) was settled by two deals. Clarion agreed to a straight debt for equity swap of their part of the loan ($60M). InterOil issued 2.7M shares at $22.65 (which was about a dollar higher than the market price when the deal was announced, and probably quite a bit more when it was negotiated).
The remaining $70M was owed to Merrill Lynch. They apparently did not like the conditions Merrill Lynch were setting, so they went around with their hat, and hey presto, ended up with $95M in it. This is a pretty bullish sign to get that much at such short notice at these conditions, and the market took it as such.
Elk4 DST #1 and 2
We now had two DST tests, you can read the full results in the pr’s, PR1 and PR2. There are a couple of noteworthy points.
1) Flow rates increased with depth, from 8.3MMcf/d to 14.1MMcf/d
2) Flow rates have been negatively impacted by heavy skin damage resulting from:
“kill operations using heavy mud and lost circulation material. The calculated stabilized flow is the rate expected at the sandface of the reservoir if all the skin damage is cleaned up, which is a relatively simple operation in limestone reservoirs.” (PR1)
Although the calculated flow rate with zero skin damage (+/- 500MMcf/d!) is a little bit of a gimmick, they are right that heavy skin damage will severely reduce gas flows and that skin damage can be cleaned up relatively easily.
3) Apart from heavy skin damage, flow rates in the second DST test were also limited by “the capacity of the Drill Stem Testing equipment at surface” and “tubular constraints” (which suggest they’re using a very small pipe, using a bigger pipe would significantly increase flow rates).
Matrix porosity?
The heavy skin damage also indicates the existence of matrix porosity. In the words of Wayne Andrews (analyst at Raymond James, in an update May 14):
First, the company described pumping heavy mud with Lost Circulation Material [LCM], to stop the flow of gas and liquids into the well bore. The LCM works to seal porous formation, but depending on the type of material may not be as effective on fractures. The fact that the LCM was effective is a potential indicator of real matrix porosity, a very positive sign for reserve potential. However, and more importantly, the heavy mud probably caused near well-bore formation damage which may have hampered the flow rate of the well in addition to the drilling fluids that were being recovered during the test. Both of these give us confidence that the well will be capable of flowing at substantially higher rates.
It’s not the only indicator, as he argues elsewhere in the same update:
the visible matrix (vugs, chalky limestone) and fracture (visible micro-fractures) porosity along with shallow marine fossil evidence observed in cuttings from the well within the recently tested limestone reservoir.
Now, Wayne Andrews argued previously (RJ 11/04/07 p3), when discussing the Elk resource estimate (3.1-15.7Tcf at that time, increasing to 3.5-18.8 after Elk2):
The low end of the range assumes only fracture porosity contribution to reserves and excludes matrix porosity. The high end als includes matrix porosity.
So, if these multiple signs of matrix porosity play out, expect a big increase in the resource estimates.
Resource thickness keeps increasing
One has to remember that Elk1 (the discovery well) was not drilled to a finish, as the ELK1 did not drill the entire ELK formation as the well was not initially designed for drilling a very permeable high pressure gas formation. Elk1 was drilled to 1983m (6506ft), with a pay zone of about 1100 feet thick.
In a recent update (June 11 2008) after the second DST at Elk4, Wayne Andrews said:
This latest test has established a new Lowest Known Gas [LKG] level at 7,586 feet, confirming a substantial gas column height of 1,948 feet.
And:
Given our belief that both Elk and Antelope are part of the same structural complex, further testing and the confirmation of hydrocarbons at this level and deeper should result in a meaningful increase in the lower-end estimate of the resource in place and provide confidence to move ahead with LNG plans.
This is saying the pay zone of Elk has been increased from about 1100 feet thick to about 1900 feet thick. And since InterOil has already cored until 7815ft and still hasn’t encountered the water contact (they are executing DST #3 these days), it keeps getting bigger. This is another reason we can expect a big increase in the resource estimate.
Condensates
According to Wayne Andrews (June 11 update):
the condensate to gas ratio continues to rise - coming in at 12.4 Bbls/MMcf in this second Elk-4 DST, up from 11.2 Bbls/MMcf in the first Elk-4 DST and 5 Bbls/MMcf in the first Elk-1 DST. This higher liquid content suggests increasing condensate with depth, consistent with findings in gas caps on oil reservoirs and increasing the probability of encountering an oil leg with further drilling.
And indeed, in the second Elk4 DST, the condensates level increased further from 82 to 175 barrels a day. After the first DST test, Wayne already allowed for condensates to be included in his valuation of IOC:
Based on the estimated liquids content given the initial Elk-4 results, we are adding incremental value for liquid resource potential (69 MMBbls at $15.00/Bbl, risked at 50%) into our risked NAV, which essentially offsets the increased share count from the recent equity offerings.
These condensates can be used directly in InterOil’s refinery, providing instant cash-flow.
Oil?
As we have seen above, the increasing condensate level with depth (not only increasing depth within Elk4, but one also has to realize the payzone at Elk4 is a lot deeper than at Elk1) certainly point to the possibility of an oil leg.
Further, lab analysis of the specific gravity of the condensate, at room temperature rather than the heated temperature from the well bore, indicated 48 degree API, very close to crude oil. The fact that the specific gravity of the condensate is increasing with depth increases the probability of encountering an oil leg as the company deepens the well.
Valuation
Wayne Andrews first calculated the value of Elk by taking:
6.9Tcf, the midpoint of the then reigning recoverable resource estimate
Value it at 75 cents per Mcf and risk it at 50%, effectively valuing it at 37.5 cents per Mcf
Deducting third parties’ stake and applying 10% discount factor for cashflow.
Now, consider the following:
1) At the time of that valuation, gas was trading at $4, now, in Asia, it trades at close to $20
2) The 37.5 cent per Mcf valuation will have to increase as a result of a quadrupling in gas prices. But not only that, risk will also be removed when Elk4 completes and an independent third party assessment of the Elk/Antelope resource comes out.
3) From a story by Bloomberg: Petronas yesterday agreed to pay A$4.91 a gigajoule for proven and probable coal seam gas reserves from Adelaide-based Santos, which Santos Acting Chief Executive David Knox said sets “a new benchmark” for reserves valuations.
Calculating it back to US$ and Mcf, that’s a valuation of US$4.75 per Mcf. That’s 13 times the valuation Wayne attached to InterOil’s resource. Now, before we get too excited:
These Santos reserves are proven and probable reserves. InterOil isn’t as far so a difference in valuation is warranted at the moment. However, they will be a lot closer with Netherland Sewell report and Elk4 concluded, which will move a lot of risk, and thereby reduce the risk factor and hence increase the resource valuation
On the other hand, coal seam gas is more difficult and costly to extract (which is why, until recently, there wasn’t a lot of interest in doing it)
The fact is, Santos also needs to build an LNG facility, they’re planning one. The first gas is expected to be delivered in 2014 (PR p15). So this is not unlike InterOil’s situation.
3) That valuation did not contain ANY provisions for oil, or any of the other 40 drilling prospects on 8.8M acres IOC has licensed in PNG. In a the latest update, some provision is being made for the liquids, but this is crossed out by the increasing share count as a result of the financing, leaving the NAV estimate essentially unchanged.
Shares short
InterOil historically has had a very high short count. The shorts have been there way before the Elk/Antelope discovery, and that is somewhat understandable. Exotic country, unknown company, lossmaking refinery. However, not only is the refinery slowly improving, the company has changed with the discovery of Elk/Antelope.
We’re now close to proving a resource. The shorts are still there because they didn’t believe this would be possible and it’s very difficult for them to get out without inflicting heavy losses on themselves. IOC has also been for 448 consecutive days on the naked short list, which is all but proof of foul play.
Other possible catalysts
The following items are set to propel the share price higher pretty soon after Elk4 has been completed:
Netherland Sewell, a world-class engineering firm, will perform an independent audit of the Elk property
An agreement with the PNG government about the LNG facility, giving Liquid Niugini (of which IOC holds a third) an almost unassailable lead over competing LNG projects
An agreement with outside (Japanese, Korean) investors for a participation in the LNG facility
The active negotiation with a strategic partner for the sale of a 10% interest in Elk, which has the potential to create an implied “industry” valuation several-fold higher than the market’s current valuation
The possibility of farm-out opportunities to industry partners, which could further accelerate the exploration of the company’s extensive acreage position.
Disclosure: Long IOC
Wireless chip developer Qualcomm Inc (QCOM.O: Quote, Profile, Research, Stock Buzz) raised its outlook for the June quarter and full year on Thursday amid higher demand for advanced mobile phones, sending its shares up 5.5 percent.
Qualcomm said it updated its view to reflect better-than-expected demand for higher-priced chips used in next-generation 3G phones, dissipating concerns among investors that a weakened U.S. economy was hurting cell phone sales.
Todd Rosenbluth, analyst at Standard & Poor's Equity Research, said investors had begun to expect that Qualcomm would see more growth from emerging markets, where lower-end handsets tend to prevail, as North America and Europe suffer from an economic slowdown.
"The numbers today show the opposite of that," he said. "They are actually getting a pickup in higher-end phones in what we'll presume are more established European and North American markets."
Rosenbluth raised his 2008 and 2009 earnings estimates for Qualcomm and boosted his target price on the shares to $48 from
$41.
Qualcomm's improved outlook comes during a week of excitement in the market for smart phones, which offer faster Web links and multimedia features like e-mail and pictures. Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) unveiled a new version of its iPhone, seeking to better compete against the likes of BlackBerry maker Research in Motion (RIM.TO: Quote, Profile, Research, Stock Buzz) (RIMM.O: Quote, Profile, Research, Stock Buzz) and Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz).
Charter Equity Research analyst Ed Snyder said Qualcomm appears to be benefiting from the competition playing out among mobile handset makers.
"Their largest customers, Samsung (005930.KS: Quote, Profile, Research, Stock Buzz) and LG (066570.KS: Quote, Profile, Research, Stock Buzz), are gaining share in 3G, so Qualcomm is gaining share," he said. Continued...