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IAE.V - It was a good buying opportunity yesterday when it dropped to $1.75. Now at $2.00.
Still quite undervalued as it received a $3.25 bid (which it declined) several weeks ago.
IAE.V/IACAF.pk Ithaca Energy 1.75 -0.30. Trading down 15% after issuing more shares. Good buying opportunity? Looks that way. Any comments appreciated.
Ithaca got a bid from Endeavour at $3.25 a few weeks ago.
You can use Yahoo Finance. Just type in CHE-UN.TO as the ticker.
SLX.AX/SILXF.PK - Here’s some DD on Silex Systems, an R&D company that I believe has a bright future. It is an energy “story stock” having some really exciting technologies in two hot fields: Nuclear and Solar.
Shares Outstanding ~145 million Market Cap: ~ $1 billion
The caveat is that their technology is not yet commercially proven.
Nuclear – SLX has developed a uranium enrichment process that is an order of magnitude more efficient than the technologies currently used. Currently used technologies are gas diffusion (invented in the 40’s) and centrifuges (1950s). 87% of nuclear enrichment is currently done using these technologies. SLX is the only 3rd generation technology currently available. The nuclear enrichment market globally is estimated at $6 billion.
They have exclusively licensed their technology to a partnership formed by GE and Hitachi called GLE. SLX received a $34 million milestone payment from GE generating a profit after tax of $8.7 million in 2007. They raised $50 million in a inst. investor oversubscribed share placement last October and currently have a strong working capital position of $65 million.
Another biggie Cameco (CCJ) has invested $124 million for a 24% stake in GLE which utilizes SLX’s enrichment technology. Read this (http://djysrv.blogspot.com/2008/06/laser-enrichment-gets-boost.html) and you’ll appreciate why this technology is compelling. Letters of Intent have been signed with Entergy and Exelon for laser enrichment services with SLX’s technology.
The US Nuclear Regulatory Commission has approved a license amendment (to an existing nuclear facility licence) to operate a Test Loop for SILEX laser-enrichment technology. The Test Loop is currently under construction in Wilmington, NC. GLE will use information from the Test Loop demonstration to make a decision on construction of a commercial facility in 2009.
SLX has a toll booth model for generating profits.
Their agreement with GE gives them a base royalty of 7% on REVENUES and an additional royalty of 5% based on total cost of deployment. Nice work if you can get it.
Solar – Their solar technology is just as compelling and exciting. SLX’s 71% owned subsidiary Translucent is currently testing an ultra high efficiency solar cell which has an efficiency of twice today’s commercially available PV cells. PV cells available today have a max efficiency of around 20%. Translucent is expected to have sample cells available for industry validation sometime soon, possibly next month. If successful, this could be a near term catalyst for significant increase in SP.
Silex Investor Presentation http://www.silex.com.au/public/uploads/investor/Lodge%20Conference%2011-04-08.pdf
The stock has been moving up after a sell-off earlier this year. I bought some SLX shares to hold and mold.
CHE-UN.TO
Chemtrade Logistics Income Fund reports significant increases in revenue, cash flows and earnings for 2008 second quarter
Tuesday July 29, 5:00 pm ET
TORONTO, July 29 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN - News) today announced results for the three months ended June 30, 2008. The continuing high price for sulphuric acid was the main driver of significant increases in revenue and earnings for Chemtrade's Sulphur Products & Performance Chemicals and International segments, which were the primary contributors to the second quarter's strong results.
Cash flows from operating activities for the second quarter were $33.7 million (2007: $8.5 million) and Distributable cash after maintenance capital expenditures for the period was $24.1 million, or $0.72 per unit (2007: $10.5 million, or $0.31 per unit), generated from revenue of $274.3 million (2007: $130.2 million) and earnings before interest, income taxes, depreciation and amortization ("EBITDA") of $29.8 million (2007: $16.3 million). Net earnings for the second quarter were $13.8 million compared with $5.0 million in the same period in 2007. The results for the second quarter of 2008 include higher unrealized losses on natural gas and foreign exchange hedges and lower realized foreign exchange gains, partially offset by lower accruals related to the Fund's long-term incentive program.
For the six months ended June 30, 2008 cash flows from operating activities were $39.8 million (2007: $14.3 million), and Distributable cash after maintenance capital expenditures was $42.0 million (2007: $17.2 million), or $1.25 per unit (2007: $0.51). EBITDA was $52.0 million (2007: $27.3 million), and revenue was $492.1 million (2007: $258.8 million). Net earnings for the first six months of 2008 were $23.3 million (2007: $4.5 million). The numbers for the year-to-date include a recovery of restructuring costs of $1.2 million in 2008 whereas there was an expense of $2.0 million recorded in 2007 relating to the cessation of powder SHS production at the Leeds plant.
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "All of our businesses reported higher earnings in the second quarter, although, as with the first quarter of this year, it was the continuing high margins for sulphuric acid in our Sulphur Products & Performance Chemicals and International segments that were the primary contributors to the improved results."
Sulphur Products & Performance Chemicals ("SPPC") generated revenue of $127.0 million and EBITDA of $23.9 million compared with $78.0 million and $14.9 million, respectively, in 2007. The higher revenue reflected substantially higher prices for merchant acid and sulphur. These were partially offset by the effect of the stronger Canadian dollar. The higher EBITDA was due primarily to improved margins on sulphuric acid. Higher acid prices more than offset higher sulphur costs and foreign exchange impact. As well, Chemtrade's two major regen plants took maintenance turnarounds in the first quarter last year, whereas in 2008 part of the turnaround of Chemtrade's largest plant took place in the second quarter.
Pulp Chemicals reported second quarter revenue of $14.4 million compared with $14.6 million in 2007. EBITDA was $5.0 million compared with $4.4 million reflecting lower costs for salt which last year were high due to the transition to a new supplier.
International reported revenue of $132.9 million for the second quarter, compared with $37.5 million in 2007. This was a result of significantly higher prices and volume for sulphuric acid, and significantly higher prices for sulphur. Spot sales of uncommitted small volumes of sulphuric acid and sulphur resulted in high margins due to the continuing tightness in global markets. Also, during the volatile market conditions prevalent in 2008, this segment was able to leverage its market knowledge and infrastructure to significantly add value to suppliers and customers and thereby earn incremental margin. International generated EBITDA for the quarter of $8.8 million compared with $1.8 million last year.
Mr. Davis said, "Our ongoing initiatives to strengthen our business and improve our operations have enabled us to take advantage of the robust market for sulphur products and expand our margins in each of the last three quarters. We expect the sulphuric acid market to remain buoyant through at least 2008 and 2009 and that our margins will continue to expand. Although we anticipate increased maintenance capital spending, we expect to generate substantially similar Distributable cash after maintenance capital expenditure over the next 12 months relative to the 12 month period ended June 30, 2008."
Distributions
Distributions declared in the second quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of the world's largest suppliers of sulphuric acid, liquid sulphur dioxide and sodium hydrosulphite, and a leading processor of spent acid. Chemtrade is also a leading regional supplier of sulphur, sodium chlorate, phosphorous pentasulphide, and zinc oxide.
XTX.TO - Definitive agreement reached to be acquired by Schneider Electric for C$15 in cash. Stock is trading at 14.73 up 9.7%
Up almost 70% since I mentioned it here in April. Too bad I didn't have it in PSL9.
http://biz.yahoo.com/iw/080728/0419509.html
XTX.TO/xarxf.pk I am not sure if anybody else on the board folows this stock but they announced they are in talks to be acquired. GE, Siemens, ABB are possible suitors. Stock is now trading in the 12's. Analysts speculate a bid in the 14 to 15 range. I own shares of XTX.TO Do your own DD.
http://www.theglobeandmail.com/servlet/story/LAC.20080724.RXANTREX24//TPStory/Business
Xantrex in takeover talks
STEVE LADURANTAYE
July 24, 2008
With alternative energy products revitalizing its balance sheet after years of disappointing results, Xantrex Technology Inc. said yesterday it is in takeover talks with an unnamed suitor.
The Vancouver-based company manufactures inverters that convert energy gathered by solar panels and wind turbines into a usable form. It also makes battery chargers and power packs, which are used by campers and boaters.
"They've had issues in the past and disappointed the Street with their earnings," said Research Capital Corp. analyst Jonathan Hykawy.
"They've had a rough ride, but at this point this is the strongest product portfolio they have ever had. Now isn't a bad time to consider a sale."
The company released a statement yesterday confirming negotiations were under way, but warned that a deal was not guaranteed. Still, the stock closed 19 per cent higher as analysts suggested a likely takeover price of $14 to $15.
"My feeling is they are quite advanced in their negotiations," said Clarus Securities analyst Carolina Vargas. "I talked to the company, and they wouldn't provide timelines. But I would think a deal will be announced sooner than later, hence the disclosure."
Xantrex posted a $541,000 profit in its first quarter, and will release its second-quarter results Tuesday. Revenue from its renewable power division, which makes inverters for the solar and wind markets, increased by 58 per cent. It is experiencing particularly strong growth in its solar business, where revenue has increased 200 per cent in the last year and it has a 30-per-cent share of the global market.
Haywood Securities analyst Ralph Garcea said the bulk of the company's new business in the last year - including a $5-million deal announced last week with SunEdison LLC - has been tied to solar energy projects.
One of its partners may have decided to absorb the company, he said.
"What's happening in wind and solar is that the large companies are making acquisitions to vertically integrate their operations," Mr. Garcea said.
"You could see someone wanting to add power inverters to their strategy. Large wind companies would definitely be interested, as well as five or six other big companies."
Analysts named General Electric Co., ABB Asea Brown Boveri Ltd., Siemens AG and Schneider SA as possible suitors, as well as SMA Solar Technology AG - one of Xantrex's chief competitors, which raised $570-million in June in Germany's largest share offering of the year. SMA chief executive officer Güenther Cramer has promised to increase capacity at a "dynamic rate," putting pressure on its smaller rivals.
"If your competitor is looking to consolidate the industry, there are a couple of ways you can look at it," said Cormack Securities analyst MacMurray Whale.
"You can raise some more capital, or you can sell to someone now. It's only recently with solar and wind taking off that the company's financial house is in order. Maybe this is the time to sell, when the market is hot."
http://seekingalpha.com/article/76651-meridian-resource-corporation-q1-2008-earnings-call-transcript?source=yahoo&page=2
Cl, Read the exchange between the Dahlman Rose analyst and management. The 6000 acres is referenced on Page 3 of the transcript.
Check out TMR. I believe they have 6000 acres in the Hainesville shale. They are bullish on the Cotton Valley too which runs above the Hainesville shale.
Downside is that the stock has already had a bit of a run. I bought a small position in the Jan 09 2.5 calls today.
FMA.TO - Hopefully this will add to an increase in the life of their currently producing mine.
First Metals Acquires Land Package
Monday June 23, 9:57 am ET
TORONTO, ONTARIO--(Marketwire - June 23, 2008) - First Metals Inc. (TSX:FMA - News) is pleased to announce that it has acquired a 100% interest in 17 claims, totaling 581 hectares, in Hebecourt Township, in the Rouyn-Noranda Mining Division, Quebec, from an arm's length third party (the "Vendor").
Under the terms of the agreement, the Company paid the Vendor $25,000 on closing and agreed to issue 50,000 FMA common shares upon regulatory approval of the transaction. In order to complete the transaction, the Company must make a further cash payment of $25,000 within 6 months and spend $150,000 and make further share issuances totaling 200,000 common shares in stages prior to its third anniversary, failing which, the title to the property shall be reconveyed to the Vendor.
The Vendor has retained a 2% Net Smelter Return (NSR) royalty on minerals and metals and a 2% Gross Overriding Receipts (GOR) on all diamonds extracted from the claims. FMA has the right at any time to purchase one percent (1%) of either royalty for $1,000,000 cash.
'This property adjoins and complements our existing Fabie project and has a number of interesting IP anomalies that fit with our regional model and are therefore attractive exploration targets." stated the Company's C.E.O. Richard Williams.
Michel Plasse, Geo. and Chief Geologist for the Fabie and Magusi projects, is the Qualified Person pursuant to NI 43-101 who has reviewed and approved the technical content of this release.
First Metals Inc. is a copper producer that is currently profitably producing from the Fabie bay Mine while advancing the Magusi project that contains copper, zinc gold and silver. The Company is listed on the Toronto Stock exchange and presently has approximately 42.8 million shares issued and outstanding.
APWR
I agree.
APWR 24.89 +0.96
Bobwins, Must be the Roth Capital upgrade or maybe because of your recommendation )
WOW!! Ferts on fire
FOS.V up 13% to 2.32
RAY.V up 28% to 1.81
MAA.V up 4.5% to 3.45
KCL.V up 7.5% to 4.14
Lentinman Thanks. Doesn't look like its going below 1 anytime soon based on the late day surge.
RAY.v/RAYMF.PK
Lentinman, What do you think of RAY.V's gap up today at the open? Your opinion on whether you see RAY.V bridging the gap is appreciated. Like cl001 I too took profits but am looking to buy back in the low 0.90's.
Oil $115
Gold $1100
Dow 11900
Bobwins, I am in APWR as well. In since 17+. Great results. Large increase in volume after the earnings but price has not moved as much. Maybe because it's had a good run in the last 4 weeks already or maybe because of the broader market plunge today. At least its green today.
nsomniyak challenge
HPX.TO - Have a large acreage position in Alberta called the West Pembina Nisku area. Exited 1Q08 with greater than 20,000 boepd. Company has projected cash flow of $5.50 for 2008. Company exceeded 1st quarter 08 projections – Cash Flow of $6 is possible. The CF is allowing management to pay down debt rapidly and look to add a strategic acquisition. Also announced share buyback.
FMA.TO – Hat tip to farwest. Extensively DD’d on VMC Junior Energy. FMA reported a profit for the last quarter (5 cents) with only one month’s operations. Con - Short mine life.
BJGL.ob – Third-party provider of logistics services in China with 24 branches and distribution centers nationwide. Diverse businesses including books and magazines, agricultural products, wood, and Chinese traditional medicine storage and transportation services. Core business is books and magazines. If their numbers are accurate: 2007 Revenue - $85.9 million; 93.4 million shares o/s; 2007 earnings 14 c/share; This stock is trading at 30 cents (a PE of 2). Revenues increased over 50% from 2006 to 2007.
LNDC – Landec is one of the fastest growing providers of whole and fresh-cut specialty packaged specialty produce. Their smart polymers extend shelf life and freshness of fruits and vegetables. Good play for the food scarcity era in which we live. They have relationships (and revenue) from Chiquita, Air Products and Monsanto. Their tie-up with Monsanto is for seed coatings that allow farmers to plant several weeks early. If their technology gets more widely accepted in various this stock could explode to a multi-multi-multi bagger. TTM revenues of $232 million; TTM Earnings of $14.5 million (56 cents per share); Cash per Share of $1.5; Stock is trading at $8.38. No debt. If you back out cash, PE of 13. Stock was hit because of issues with the accounting treatment in past quarters but looks like they are working through that issue.
MOL.TO – Western Aussie Copper and Molybdenum miner. 20 to 30 year Mine life. Capital costs for mine are locked in. $1bn capital cost; 3 year payback; Operations startup in Jul 09. Moly global demand expected to outstrip supply. Average annual production: 24 million pounds of Moly, 27 million pounds of Copper and 500,000 ounces of silver. Current market cap - $325 million
ALJJ.PK – Well discussed on the VMC boards. Steel mill operator. Balance sheet woes but operations are throwing off lot of cash. If operations continue in this manner, stock could be a double during the contest period.
OT XIN is a stock that could possibly benefit from the reconstruction. It has sold off slightly on the earthquake news but company has said that there was no damage to any of their projects. Good financials. I have a long position in XIN.
Great tip michael. I can see clearly now....
XIN - Gold, thanks for mentioning it. China real estate developer primarily building in Tier II cities. Their projects are unaffected by the recent quake.
Stock looks real undervalued here. Trading at $9.20. Cash of $6.1 per share. Preannounced revenue growth of almost 700% year over year for the upcoming quarter. Going to have a blowout quarter. Stock is trading at 50% of its IPO opening day price of $18. I initiated a position today.
ATPG
Cl001
Your post reminded me of the situation I had with MMR a few weeks ago where I thought the stock had gone up too far too fast. It has gone from from around 12 to 32 (where it is trading today) relatively quickly after it announced good earnings just like ATPG. I sold out of MMR at 26 thinking it was going to pull back but it has since kept on going. With oil at $120+, the market is rewarding companies that are executing.
Here's a comparison of the charts of MMR and ATPG.
http://finance.yahoo.com/echarts?s=atpg#chart2:symbol=atpg;range=2y;compare=mmr;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Looks like ATPG's rise has not been as steep as MMR's, so maybe we can see more upside before the inevitable consolidation. I have a nice size long option position in ATPG that I am holding even though it has been tempting to take profits here.
XTX.TO Up 5+% today to $10.12. Seeing buying interest after its earnings 10 days ago when it was trading in the 8's. I had expected the stock to decline slightly after earnings but it has remained strong.
It doesn't matter if your energy of choice is solar, wind, flywheels, fuel cells or any other flavor, you still need the gizmos that Xantrex makes to convert the raw electrical energy you get from renewables to usable power.
Stock has a market cap of ~ $300 million. Revenues over the next 4 quarters are expected to be greater than $300 million. The company is positioned well in the right space at the right time.
I own shares of XTX.TO.
nsomniyak, On their one page website (www.cosinecom.com), they state that their plan is to acquire new business operations to take advantage of their NOL's. Steel Partners continued to buy shares as late as December 2007.
I don't have any other current information. The contact info for their sole employee, the CEO is provided on their website.
When Middle East countries with large hydrocarbon reserves are looking at building nuclear plants, can a uranium bull run be far behind?
http://www.thepeninsulaqatar.com/Display_news.asp?section=Local_News&month=April2008&file=Local_News2008042415942.xml
Bobwins, I also own STM.v (your pick thanks) and CCJ which has been rallying the last few days. I am also DDIng ES. This is not a microcap and I don't own a position yet.
COSN.PK trading near cash with $20 in NOL's according to this Seeking Alpha article.
http://seekingalpha.com/article/74544-cosinetrading-at-cash-20-share-of-nols?source=yahoo
I suggest investors think of CoSine Communications (COSN.PK) as a Special Purpose Acquisition Vehicle [SPAC] that is trading at cash. I have followed Cosine for years. They used to sell network equipment to the telecoms and once sported a market cap of $5B.
Today, the market cap is $25M (yes, million), which is close to its cash position of $23M. The company has only 1 employee--a CEO--and is profitable because interest income is greater than operating expenses.
Here's the reason to own the stock: The well-known activist fund, Steel Partners, together with an affiliate, own just under 50% of the shares. Their average price is roughly $2.25. Steel Partners and COSN are looking to acquire a profitable company in order to take advantage of COSN's $207M of Net Operating Loss [NOL] carry-forwards. That's $20/share in NOLs. After talking with the CEO, it's my belief that COSN will probably buy a profitable division within a much larger company. After all, Steel Partners does a lot of deals, and at some point they should be able to find the perfect company to slide into this shell. Given the valuations of SPACs pre- and post-acquisitions, I think COSN's ultimate valuation could be 2x-4x today's.
XTX.TO reported revenues of $62 mill down from $72 mill in the 4th quarter. Significant revenue growth YOY but stock may sell off in the short term. Conference call tomorrow should provide more details.
Xantrex Technology Inc. Reports 2008 First Quarter
(Download PDF version)
VANCOUVER, B.C., April 29, 2008 – Xantrex Technology Inc. (TSX:XTX) reported financial results for the first quarter ended March 31, 2008. Revenue rose 55 percent to $62.0 million from $39.9 million for the year-ago quarter as a result of revenue growth in all three market segments, Renewable, Programmable, and Mobile power.
Net income was $541,000, or $0.02 per diluted share, compared with a loss of $108,000, or $0.00 per diluted share, a year ago. Adjusted net income was $2.4 million, or $0.08 per diluted share, compared with $527,000, or $0.02 per diluted share. Adjusted EBITDA was $5.8 million, compared with $1.5 million a year ago. (Please see table below for a reconciliation of the non-GAAP measures to net income.)
The improvement in net income reflected strong revenue growth and higher gross margin, partially offset by higher non-cash amortization expense for intellectual property, and higher net interest expense resulting from the acquisition of Elgar Electronics Corporation which closed March 12, 2007.
Gross margin increased to 33.2 percent from 30.9 percent a year ago. The improvement reflected higher margins on Renewable Power products introduced over the last year, a full quarter of Programmable Power revenue compared with the three weeks included for the year-ago quarter, and our ability to recover raw materials cost increases with higher selling prices. These improvements were partially offset by a charge for consolidation of manufacturing facilities. Excluding the consolidation charge, gross margin would have been 34.4 percent.
Mr. John Wallace, CEO of Xantrex, commented, “Strong revenue growth, higher gross margin, and effective expense control contributed to improved profitability. The highlight of the quarter was the strong revenue growth in Renewable Power, up 58 percent from a year ago. Renewable Power growth was driven by solar inverter sales especially in Europe. Programmable Power revenue rose 100 percent, attributable to last year's acquisition. Mobile Power benefited primarily from strength in products for commercial markets, work vehicles and trucks.”
Mr. Wallace continued, "As targeted in our 2008 outlook, operating expenses have been contained in line with the fourth quarter of 2007. The other expense category compared unfavorably with a year ago primarily because of net interest expense associated with debt incurred for the Elgar acquisition. In the 2008 quarter, the foreign exchange gain reported of $874,000 was offset by the foreign exchange impact on operating income of $832,000, primarily from operating expenses denominated in the higher Canadian dollar.”
Mr. Wallace concluded, "No change in our stated target for 2008 to grow our overall revenues and to more than double our adjusted EPS and EBITDA compared with 2007. Strength in our renewable business appears sufficient to overcome effects of a slowing U.S. economy on our programmable and mobile businesses."
Mr. Mossadiq S. Umedaly, Xantrex's Chairman, said, "We met revenue expectations and exceeded EPS expectations as a result of strong revenue growth and improved profitability despite a charge for the nearly completed facilities consolidation. I am pleased that for a second quarter in a row the company has shown improving financial results and met expectations.”
XTX.TO - Renewable energy play. Earnings out today after close. Stock has been trending up slightly on low volume past few days in anticipation of earnings.
I think STP.V is up because Total made a bid for Synenco. At these oil prices, oil sands are a great strategic asset for those with the money to develop them.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080428.wsynenco_staff0428/BNStory/energy/?page=rss&id=RTGAM.20080428.wsynenco_staff0428
Total snaps up Synenco Energy
NORVAL SCOTT
Globe and Mail Update
April 28, 2008 at 12:30 PM EDT
CALGARY — Oil sands junior Synenco Energy Inc. has found a buyer at last, announcing Monday that French super-major Total SA will acquire the company in an all-cash deal for around $478 million.
Calgary-based Synenco has been up for sale since last May, when the company said it couldn't afford to build its Northern Lights oil sands project — a $10.7-billion, 100,000-barrel-a-day oil sands mining and upgrader development that's 60-per-cent owned and operated by Synenco.
“Significant new capital would be required to develop Northern Lights,” said Synenco chief executive Mike Supple in a conference call. “These resources are more valuable in the hands of a company with the capital to develop them.”
Total will pay $9 a share for Synenco, a 16-per cent premium to the company's closing price on Friday of $7.79 per share. The boards of both firms have approved the deal, and Synenco has agreed to recommend that its shareholders accept the offer.
Synenco to cut two-thirds of work force
Synenco signals it's for sale
That price is a substantial discount to Synenco's stock price when the company went public in November 2005, when shares in the firm were worth $17.50 each. Synenco did trade as high as $26 a share in 2006, while the firm was valued at around $750-million last May when it announced it was seeking a sale.
On Monday, Synenco shares surged to trade slightly above the offer price, changing hands at $9.02 per share at noon EDT, good for a gain of 15.7 per cent.
While oil sands negotiations typically take longer to resolve than those in the conventional oil and gas sector, the market saw the lack of resolution to the strategic review process as indicative that Synenco wasn't a particularly attractive target for potential buyers. In February, Synenco parted ways with then-CEO Todd Newton and said its board would take over the strategic review process.
From that point, the company engaged in negotiations with Total, resulting in the current deal, said Mr. Supple.
We've had a thorough review process with a worthy result. It's fair from a financial point of view,” he said.
Total will retain Synenco's current staff, who currently number about 60 employees, he added. Synenco has been laying off workers since last June, when it employed over 150 people.
William Lacey, a Calgary-based analyst at FirstEnergy Capital Corp., said Total would likely use Northern Lights to provide additional supplies for the upgrader it plans to build near Edmonton, in order to improve that project's economics.
Total is already a significant player in Alberta through its $1.4-billion acquisition of Deer Creek Energy in 2005, and is planning a $9-billion oil sands project called Joslyn.
“It looks like they're looking for ways to enhance their upgrader strategy and get more barrels behind it,” he said.
Mr. Lacey added that the nature of Synenco's assets – Northern Lights is far away from existing infrastructure, and is seen as relatively expensive to develop – likely dissuaded other bidders. Any buyer of the company would also take on a foreign partner, as the remaining 40 per cent of Northern Lights is held by SinoCanada Petroleum Corp., an arm of China Petroleum & Chemical Corp. (Sinopec).
“There's a lot of questions about these assets against others, and it's not a huge project from the perspective of guys looking to come in,” he said.
STP.V up $0.17 to $0.92 - Waking up from the deep freeze. Maybe because of impending news?
Well Done Researcher. Kudos to you. You nearly lapped the field.
Littlefish, great finishing kick at the end. You must be a distance runner (swimmer?).
Skillz and lentinman, great job. Really enjoyed the contest.
Xantrex Technologies (XTX.TO/XARXF.PK) might be a way to play the renewable energy sector.
Xantrex designs, and manufactures advanced power electronics that convert power from renewable, advanced power and storage solutions - such as solar, wind, fuel cells, microturbines, batteries, and flywheels - into electrical power that can be used as a primary or backup power source for homes and small businesses to industrial and utility applications. Their inverters converts DC energy generated by the solar panels/wind turbines etc. into clean, useable AC power.
Shares o/s: 28.9 million
Market Cap: 245 million
Revenues
Q1 '07 - $39.9 million (Net Income -0.1 million)
Q2 '07 - $59.2 million (Net Inc. -1.2 million)
Q3 '07 - $62.1 million (Net Inc. -1.1 million)
Q4 '07 - $73 million (Net Inc. + 0.5 million)
Earnings coming out next week and they are expected to report a profit. I bought shares today in expectation of positive earnings and continued strong revenue growth.
MMR- 24.80 +1.90 (up 8%) after a good earnings report. Taking some profits as stock is up over 100% since I mentioned it here 4 months ago.
http://biz.yahoo.com/bw/080417/20080417005624.html?.v=1
McMoRan Exploration Co. Reports First-Quarter 2008 Results
Thursday April 17, 8:03 am ET
NEW ORLEANS--(BUSINESS WIRE)--McMoRan Exploration Co. (NYSE:MMR - News):
HIGHLIGHTS
First-quarter 2008 net income of $32.0 million, $0.46 per fully diluted share, compared with a net loss of $14.9 million, $0.53 per share, in the first quarter of 2007. First quarter 2008 results included a mark-to-market unrealized loss of $41.6 million, $0.49 per fully diluted share, on open oil and gas derivative contracts.
First-quarter 2008 production averaged 294 million cubic feet of natural gas equivalents per day (MMcfe/d) net to McMoRan, compared with first-quarter 2007 average production of 70 MMcfe/d and 295 MMcfe/d in the fourth quarter of 2007.
Continued positive results from the Flatrock field at South Marsh Island Block 212 in the OCS 310/Louisiana State Lease 340 area indicate a major discovery:
Flatrock No. 1 discovery well commenced production on January 28, 2008. Gross production currently approximates 50 MMcfe/d, 12 MMcfe/d net to McMoRan.
Flatrock No. 2 encountered 8 pay sands totaling 289 net feet of pay confirmed by wireline logs in January 2008. Successful production test in April 2008 at a gross rate of 114 MMcfe/d, 21 MMcfe/d net to McMoRan. First production expected in mid-2008.
Flatrock No. 3 encountered 3 pay sands totaling 126 net feet of pay confirmed by wireline logs in February 2008. The well has been sidetracked to 17,100 feet and has a proposed total depth of 18,800 feet.
Flatrock No. 4 well commenced drilling on April 9, 2008 and is currently drilling below 3,500 feet to proposed total depth of 18,500 feet.
Additional wells are being planned in the Flatrock area.
Mound Point East exploratory well on Louisiana State Lease 340 commenced drilling on March 31, 2008. Currently drilling below 7,800 feet to a proposed total depth of 18,050 feet.
The ultra-deep exploratory well at South Timbalier Block 168 was re-entered on March 18, 2008 and is currently drilling below 30,145 feet to evaluate potentially significant Miocene targets.
First-quarter 2008 operating cash flows totaled $172.8 million. Credit facility borrowings were reduced by $111 million during the first quarter of 2008 and totaled $163 million at March 31, 2008.
Completed privately negotiated transactions to induce conversion of approximately $32 million, including $7 million in April 2008, of 6% convertible senior notes into approximately 2.2 million shares of common stock.
Basic shares outstanding approximate 55.6 million and approximately 85.5 million shares assuming conversion of McMoRan’s mandatory convertible preferred stock, outstanding convertible notes and warrants.
Average daily production for 2008 expected to approximate 285 MMcfe/d net to McMoRan, including 285 MMcfe/d in second quarter of 2008. Potential to increase production with further success at Flatrock and other exploration prospects.
Continuing active drilling program on 150,000 gross acreage position on OCS 310/Louisiana State Lease 340 area, including additional wells at Flatrock in 2008.
Capital expenditures for 2008 estimated to approximate $250 million.
McMoRan Exploration Co. (NYSE: MMR - News) today reported net income applicable to common stock of $32.0 million, $0.46 per fully diluted share, for the first quarter of 2008 compared with a net loss applicable to common stock of $14.9 million, $0.53 per share, for the first quarter of 2007. McMoRan's net income from its continuing operations for the first quarter of 2008 totaled $37.2 million, including a loss of $41.6 million, $0.49 per fully diluted share, for non cash mark-to-market charges on McMoRan’s open oil and gas derivative contracts. During the first quarter of 2007, McMoRan’s net loss from continuing operations totaled $16.8 million, including $9.8 million of exploration expense and $2.7 million of start-up costs associated with the Main Pass Energy Hub™ (MPEH™).
SUMMARY FINANCIAL TABLE(1)
First Quarter
2008 2007
(In Thousands, Except Per
Share Amounts)
Revenues $ 295,476 $ 51,697
Operating income (loss) 55,825
a
(11,923 )
Operating cash flow 172,816 8,478
Net income (loss) from continuing operations 37,231
a
(16,829 )
Net income (loss) from discontinued operations (856 ) 2,331
Net income (loss) applicable to common stockb
32,009
a
(14,903 )
Diluted net income (loss) per share:
Continuing operations $
0.47
a
$ (0.61 )
Discontinued operations (0.01 ) 0.08
Applicable to common stockb
0.46
a
(0.53 )
Diluted average common shares outstandingc
85,154
d
28,358
a.
Includes McMoRan's loss on its oil and gas derivative contracts totaling $45.2 million, $0.53 per share, reflecting $41.6 million, $0.49 per share, of mark-to-market accounting adjustments on open contracts and $3.6 million, $0.04 per share, in losses realized on settled contracts during the first quarter of 2008.
b.
After preferred dividends.
c.
See Note c on page I.
d.
Assumes full conversion of McMoRan's 6% Convertible Senior Notes, 5 1/4% Convertible Senior Notes, 6.75% Mandatory Convertible Preferred Stock, and the dilutive effect of outstanding stock options and warrants into 31.2 million shares.
(1)
If any in-progress well or unproved property is determined to be non-productive prior to the filing of McMoRan's first-quarter 2008 Form 10-Q, the related costs incurred through March 31, 2008 would be charged to exploration expense in the first quarter 2008 financial statements. McMoRan's investment in its five in-progress or unevaluated wells totaled $70.6 million at March 31, 2008.
James R. Moffett and Richard C. Adkerson, Co-Chairmen of McMoRan, said, “Our first quarter 2008 results reflect strong performance from our producing properties and continued positive drilling results in the Flatrock field. Strong cash flows are enabling us to invest aggressively in our future growth, including commencing drilling at the potentially significant ultra-deep South Timbalier Block 168 No. 1 well, and to strengthen our balance sheet through debt reductions. We are pleased with the results of our deep drilling activities and look forward to advancing this program to build values for shareholders. The theme of our annual report ‘Preparation Meets Opportunity’ reflects our view that we are well-positioned to take advantage of our lease position and significant inventory of high potential prospects.”
EXPLORATION ACTIVITIES
Since 2004, McMoRan has participated in 17 discoveries on 32 prospects drilled and evaluated, including the Flatrock discovery in the third quarter of 2007. Five additional prospects are either in progress or not fully evaluated.
Following the initial discovery at Flatrock on South Marsh Island Block 212 in the OCS 310/Louisiana State Lease 340 area in approximately 10 feet of water, McMoRan continues to pursue opportunities in the area aggressively. Recent results include the commencement of production at Flatrock No. 1 (location “A”) on January 28, 2008, successful delineation wells at Flatrock No. 2 and No. 3 (location “B” and “D”) and a production test of the Flatrock No. 2 well at a gross rate of 114 MMcfe/d. Production can be brought on line quickly using the Tiger Shoal facilities in the immediate area.
The Flatrock No. 3 well, which is targeting additional Operc sands below 17,100 feet, has been sidetracked to 17,100 feet. The well has a proposed total depth of 18,800 feet. The Flatrock No. 4 well (location “C”) commenced drilling on April 9, 2008 at a location 2,750 feet north of the Flatrock No. 1 well and 3,200 feet south-southeast of the Flatrock No. 2 well and is drilling below 3,500 feet to a proposed total depth of 18,500 targeting Rob-L and Operc sands seen in the area.
Following is a status report on activities in the Flatrock area:
Flatrock Wells Total Pay
Intervals
Net Feet
of Pay(1)
Status
No. 1 – “A” location
Discovery Well
8 260 Gross production currently approximates 50 MMcfe/d,~12 MMcfe/d net to McMoRan
No. 2 – “B” location
Delineation Well
8 289 Tested 103 MMcf/d and 1,890 bbls/d gross, 21.4 MMcfe/d net: first production expected mid-2008
No. 3 – “D” location
Delineation Well
3 126 Spud November 6, 2007: drilled to 17,100’ with a proposed total depth of 18,800’
No. 4 – “C” location
Development Well
n/a n/a Spud April 9, 2008: drilling below 3,500’ with a proposed total depth of 18,500’
(1) Confirmed with wireline logs.
McMoRan controls approximately 150,000 gross acres in the Tiger Shoal/Mound Point area (OCS 310/Louisiana State Lease 340) and has multiple additional exploration opportunities with significant potential on this large acreage position. McMoRan has a 25.0 percent working interest and an 18.8 percent net revenue interest in Flatrock.
The Mound Point East exploratory well on Louisiana State Lease 340 commenced drilling on March 31, 2008 and is drilling below 7,800 feet. The well has a proposed total depth of 18,050 feet and will target Operc sands in the middle-Miocene. Mound Point East is located in less than 10 feet of water approximately 10 miles east of the Flatrock field. McMoRan is targeting deep geologic features in the Mound Point area similar to those discovered in the Flatrock field. McMoRan holds a 32.5 percent working interest and a 23.2 percent net revenue interest in the well. Plains Exploration & Production Company (NYSE: PXP - News) holds a 43.4 percent working interest. McMoRan’s investment in Mound Point East totaled $2.2 million at March 31, 2008.
McMoRan re-entered the South Timbalier Block 168 No. 1 wellbore, formerly known as the Blackbeard West No. 1 ultra-deep exploratory well, on March 18, 2008. The Rowan Gorilla IV rig has drilled through cement plugs set by the previous operator. This well is currently being deepened below 30,145 feet to a proposed total depth of 31,267 feet to evaluate potentially significant Miocene targets. McMoRan operates the well and owns a 32.3 percent working interest. McMoRan’s partners, Plains Exploration & Production Company and Energy XXI (NASDAQ: EXXI - News), hold a 35 percent working interest and 20 percent working interest, respectively. McMoRan’s investment in South Timbalier Block 168 No. 1 well totaled $0.5 million at March 31, 2008.
Subject to certain preferential rights held by third parties, McMoRan has also agreed to assign a proportional share of its interest in approximately 425,000 gross acres associated with the ultra-deep trend to PXP and EXXI. In addition to their working interest share of well costs, PXP and EXXI will pay up to $9.7 million and $5.5 million, respectively, for the right to participate in the re-entry of the South Timbalier Block 168 No. 1 well and in the assigned acreage. The Blackbeard West No. 1 well, located in 70 feet of water, was drilled to 30,067 feet by the original operator and its partners but was temporarily abandoned in August 2006 prior to reaching the objective depth.
McMoRan currently has rights to approximately 1.5 million gross acres and is developing plans to participate in the drilling of additional exploratory wells in 2008, including the Tom Sauk and Gladstone prospects on Louisiana State Lease 340, which lie below the significant historical shallow production at Mound Point.
McMoRan was high bidder on seven leases for a total of $1.2 million at the March 2008 Minerals Management Service Outer Continental Shelf Sale 206 for leases in the Central Gulf of Mexico. The leases are South Marsh Island Blocks 21 and 125, Eugene Island Blocks 134 and 155, and Ship Shoal Blocks 212, 184 and 192.
PRODUCTION AND DEVELOPMENT ACTIVITIES
First-quarter 2008 production averaged 294 MMcfe/d net to McMoRan, compared with 70 MMcfe/d in the first quarter of 2007. First-quarter 2008 average production was higher than our previously reported estimate on January 18, 2008 of 270 MMcfe/d because of stronger performance from the properties acquired in August 2007 and from the Flatrock No. 1 well. First production is expected to commence at the Flatrock No. 2 and Cottonwood Point wells in mid-2008. Average daily production for 2008 is expected to approximate 285 MMcfe/day net to McMoRan, including 285 MMcfe/day in the second quarter of 2008. Production estimates for 2008 have increased from previous estimates because of improved performance in the first quarter and recent drilling success in the Flatrock field. Additional success at Flatrock and other exploration prospects could increase future production further.
REVENUES
McMoRan’s first-quarter 2008 oil and gas revenues totaled $291.9 million, compared to $51.4 million during the first quarter of 2007. During the first quarter of 2008, McMoRan’s sales volumes totaled 17.9 Bcf of gas, 1.1 million barrels of oil and condensate and 2.5 Bcfe of plant products, compared to 3.9 Bcf of gas, 344,400 barrels of oil and condensate and 0.4 Bcfe of plant products in the first quarter of 2007. McMoRan’s first-quarter comparable average realizations for gas were $9.06 per thousand cubic feet (Mcf) in 2008 and $7.59 per Mcf in 2007; for oil and condensate McMoRan received an average of $97.40 per barrel in first-quarter 2008 compared to $54.24 per barrel in first-quarter 2007.
FINANCING TRANSACTIONS
Since the beginning of 2008, McMoRan has privately negotiated transactions to induce conversion of $32 million, including $7 million in April 2008, of its 6% Convertible Senior Notes due July 2, 2008 into approximately 2.2 million shares of its common stock based on the $14.25 conversion price for the convertible notes. McMoRan paid an aggregate $0.8 million in the transactions, which will be reflected as non operating expense in McMoRan’s statement of operations ($0.7 million was recorded in the first quarter of 2008). After giving effect to these conversions, the remaining principal amount outstanding on McMoRan’s 6% Convertible Senior Notes approximates $69 million and its common shares outstanding total approximately 55.6 million shares. Assuming conversion of McMoRan’s outstanding mandatory convertible preferred stock, convertible notes and warrants, McMoRan would have approximately 85.5 million shares outstanding.
CASH FLOWS, CAPITAL EXPENDITURES AND REVOLVER BORROWINGS
First-quarter 2008 operating cash flows totaled $172.8 million, including $28.7 million in working capital uses. Capital expenditures totaled $51.4 million for the first quarter of 2008. Capital expenditures for 2008 are expected to approximate $250 million, including approximately $90 million in exploration associated with Flatrock and other opportunities and $160 million in development costs. Capital spending may change as additional opportunities become available and to fund additional development capital expenditures on successful wells.
On March 31, 2008, McMoRan had unrestricted cash and cash equivalents of $6.4 million and $163 million in borrowings under its revolving bank credit facility, a reduction of $111 million from December 31, 2007. On March 31, 2008, availability under McMoRan’s revolving bank credit facility was $317 million, after taking into account borrowings and $100 million in letters of credit for abandonment obligations associated with the acquired properties.
DERIVATIVE CONTRACTS
In connection with McMoRan’s oil and gas property acquisition in 2007 McMoRan entered into derivative contracts to hedge a portion of its production during 2008 - 2010 for the periods covering January-June and November-December through a combination of swaps and puts. Following is a schedule of open swap positions:
Natural Gas Positions
(million MMbtu)
Oil Positions
(thousand bbls)
Annual
Volumes
Average
Swap Price
Annual
Volumes
Average
Swap Price
2008 8.8 $ 8.68 379 $ 73.29
2009 7.3 $ 8.97 322 $ 71.82
2010 2.6 $ 8.63 118 $ 70.89
These derivative contracts have not been designated as hedges for accounting purposes. Accordingly, our derivative contracts are subject to mark-to-market fair value adjustments and unrealized gains and losses are recognized immediately in our operating results. McMoRan’s first-quarter 2008 results included a realized cash loss of $3.6 million and an unrealized loss of $41.6 million for mark-to-market accounting adjustments associated with open derivative contracts based on changes in their respective fair market values through March 31, 2008. McMoRan’s fair value net liability after mark-to-market adjustments was $42.2 million at March 31, 2008. We may consider future opportunities to hedge other portions of our production.
MAIN PASS ENERGY HUB™ UPDATE
McMoRan is continuing discussions with potential energy suppliers to develop commercial arrangements for the MPEH™ facilities. As previously reported, MARAD approved McMoRan’s license application for its MPEH™ project in January 2007.
The project’s location near large and liquid U.S. gas markets and the significant potential of the onsite cavern storage provide attractive commercial opportunities for LNG suppliers, natural gas consumers and marketers. The MPEH™ facility, as approved, is expected to be capable of storing 28 Bcf of gas in underground storage caverns, producing natural gas liquids and regasifying LNG at a peak rate of 1.6 Bcf per day.
Prior to commencing construction of the facility, McMoRan expects to enter into commercial arrangements that would enable McMoRan to finance the construction costs of the project.
McMoRan Exploration Co. is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of a multifaceted energy facility at the MEPH™, including the potential development of a facility to receive and process liquefied natural gas and store and distribute natural gas. Additional information about McMoRan and the MPEH™ project is available on its internet website “www.mcmoran.com” and at “www.mpeh.com.”
MMR - Good article on the company
http://www.forbes.com/2008/04/07/moffett-mcmoran-freeport-pf-ii-in_jl_0407soapbox_inl.html?partner=yahootix
A Gold Mine In Oil Exploration
Joan E. Lappin, Gramercy Capital 04.07.08, 2:00 PM ET
So far in 2008, McMoRan Exploration (nyse: MMR - news - people ) has been among the best performers in the oil and gas sector, already up 54%. It also has seen enormous insider buying that began about a year ago and has continued into recent weeks.
In one of the best cases ever of "follow the money," Co-Chairman Jim Bob Moffett sold shares of Freeport Copper and Gold (nyse: FCX - news - people ) at $117 per share (just under its $120 peak ) in the first half of 2007 and began redeploying those funds into McMoRan. Freeport has fallen in value, and McMoRan has finally moved into gear.
McMoRan has undergone quite a transformation during the last year. Moffett is widely respected as one of the world's truly great geologists. Over his career he has found oil, gas and sulfur deposits in the salt domes off of Louisiana's Gulf Coast. He also found the world's largest gold and copper mine: the Grasberg Mine in Indonesia.
It was Freeport-McMoRan Copper and Gold's discovery and development of Grasberg that propelled that company to be able to take over Phelps Dodge a little more than a year ago. It was a clear case of the flea swallowing the elephant by taking on billions in debt to accomplish the transaction. But the surging prices of copper and gold allowed Freeport to retire a large amount of that debt in just its first year as a combined company. To some extent, management hopes to do something similar with McMoRan.
In the last couple of years, Moffett has returned his attention to the shallow Gulf of Mexico to pursue his belief that there is significant gas to be found below shallow fields that have previously been discovered and produced to the point of exhaustion. The chosen vehicle was McMoRan Exploration (nyse: MMR - news - people ).
Wildcat drilling is always a high-risk, high-reward activity. It is not something that fits with the giant corporate mentality that tends to grow more and more restrictive and ossified as companies increase in size.
Most of the major oil companies in the U.S. have merged in recent years to form gigantic corporations. To some extent, these companies believed it was easier to "drill" on Wall Street by buying proven reserves than to actually implement a successful drilling program. For example, Exxon merged with Mobil, and Chevron (nyse: CVX - news - people ) acquired Texaco in recent years.
Every time a merge of this scope occurred and the companies got larger and larger, more and more prospects were left undeveloped. So geologists are fired after these mega-mergers, and the number of prospects that are pursued diminishes.
Years ago, a deep well was drilled to perhaps 10,000 feet. That was as deep as one could look into the earth with the available geological tools--and also about as far into the ground as anyone knew how to drill a well and push pipe into the hole.
Over the last two decades, supercomputing allowed new skill levels in interpreting seismic data of below-ground structures. Wells are now drilled as deep as 30,000 feet with increasing regularity. New techniques have been developed to "sidetrack" a well when the pipe gets stuck or to control the pressures and temperatures found five miles down into the earth's crust with blow-out preventers and special purpose high-tech drilling rigs.
Moffett believed that by using new seismic tools and drilling techniques the company might discover deeper and larger pools of gas under the now-exhausted shallow pools of oil and gas.
Because of Moffett's reputation as a superb geologist, McMoRan set about approaching a lot of the larger companies that had unexplored acreage in the shallow Gulf region to work cooperatively. Some of the wells the company has drilled in the Gulf of Mexico have been located either onshore in Louisiana or in water as shallow as only 10 feet. Since 2004, McMoRan has participated in 17 discoveries on 32 prospects that have been drilled and evaluated, including four announced discoveries in 2007. Three additional prospects are not fully evaluated.
Companies are lucky if they hit on one of 10 wells, so such a high success rate has been noteworthy even when the production from those wells was not impressive.
Last year, particularly as credit markets began to tighten, McMoRan had a rocky ride in the stock market. A high-risk drilling program coupled with a weak balance sheet is not a winning combination. McMoRan's early successful wells did not produce as much gas as expected to generate sufficient cash flow to keep the drilling program moving along, so management needed to try something different.
Because McMoRan is a small company out shooting elephants, it usually farms out stakes in the wells it is drilling. That way, it's spreading its own risks across more drilling prospects with its capital budget--this year expected to exceed $230 million.
This past summer, McMoRan made a deal with Newfield Exploration (nyse: NFX - news - people ) to acquire a large number of producing properties from Newfield that included acreage adjacent to the principal areas of McMoRan's drilling programs. The production also provides cash flow to support the stock.
As with the Freeport acquisition of Phelps Dodge, the Newfield deal was done with a lot of borrowed capital. When the credit markets imploded in August in the first phase of the credit crunch, McMoRan was still trying to raise capital to complete the Newfield transaction. The stock sale of 16.25 million shares was completed only by severely cutting the price of the stock. The investment bankers put the shares into fairly weak hands that didn't seem interested in holding the stock. On Nov. 21, 2007, the stock fell to a recent low of $10.70. Insiders, however, backed up their trucks and started buying even more than they already owned.
Moffett chose to use some of the capital he got from selling some Freeport at $117 in mid-2007 to buy additional shares in the stock offering. He also bought an additional 500,000 shares between Jan. 1 and Dec. 5, 2007 at prices between $10.88 and $11.62. He currently owns 10.3% of McMoRan shares.
Also noteworthy: Director Robert Day has bought at least 1.7 million shares since November. He has been a director since 1994, but has only recently begun loading up on his McMoRan holdings.
Some shares were purchased in recent weeks at prices above $16.
Since November, the Newfield Properties have begun to generate cash flow for McMoRan. In addition, the company has announced several important discoveries in the shallow Gulf. The ready availability of pipelines in this area means that the company can take any production immediately to market.
Last week, McMoRan announced that its first-quarter 2008 production would exceed previous estimates of 270 millions of cubic feet equivalent per day and run closer to 290 million.
Now, the short interest in McMoRan is close to 20% of the shares outstanding. Since there is very little available float, it appears that some of these shorts are naked (which means they improperly shorted the stock without borrowing the shares first).
The stock is held in large percentage interests by several major institutions, including Wells Fargo (nyse: WFC - news - people ) (10.9%), Fidelity (4.96%), Franklin Resources (nyse: BEN - news - people ) (6.3%) and the Bass Family, among others. Insiders own about 20%, including the interests held by Moffett, Co-Chairman Richard Adkerson, Robert Day and another director, Gerald J. Ford, who recently added to his position to bring his total ownership to 1,886,448 shares.
Even though this has been a solid year for a lot of energy companies, McMoRan has already been one of the biggest gainers, +54% year-to-date. This is partly because of its poor fourth-quarter stock performance and partly because of recent favorable drilling reports.
Several other drilling prospects are underway. More favorable news should only improve the outlook for McMoRan. As with all oil and gas plays, this stock will trade on its discoveries and any dramatic increases in proven reserves.
This is one of the best cases I have ever seen of follow-the-money. McMoRan is where Moffett is spending the bulk of his time. The insiders have been investing heavily in this stock for more than a year. Even though it is a small company, it has a resourceful management team with a demonstrated record of building an important large-scale natural resources company.
True wealth is rarely accumulated through short-term trading. It only accrues for those who are truly patient long-term investors. While the risk remains that there will be no future discoveries, we are convinced that MMR offers a terrific opportunity.
MMR +1 to $20.16 - Another new 52 week high today on strong volume. Probably resulting from good news this week including an analyst upgrade and Increased first quarter guidance from 270MMcfe/d to 290 MMfce/d.
Consolidation among 3 gold miners. PIK.V up 15% TO $0.70. The other stocks involved in the combination are also up. Market seems to like the announcement.
http://biz.yahoo.com/iw/080331/0381647.html
Metallica Resources, New Gold and Peak Gold Announce Proposed US$1.6 Billion Business Combination to Create a New Intermediate Gold Company
Monday March 31, 6:59 am ET
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Mar 31, 2008 -- Metallica Resources Inc. ("Metallica Resources") (Toronto:MR.TO - News) (AMEX:MRB - News), New Gold Inc. ("New Gold") (Toronto:NGD.TO - News) (AMEX:NGD - News), and Peak Gold Ltd. ("Peak Gold") (CDNX:PIK.V - News) are pleased to announce they have signed a letter agreement to complete a business combination (the "Transaction"), creating a new globally diversified intermediate gold company with a market capitalization of approximately US$1.6 billion. The combined company, to be called New Gold Inc., will own three operating gold mines in Australia, Brazil and Mexico, and have a strong balance sheet to fund development stage projects in Canada and Chile, including the New Afton mine, which is scheduled to commence production in late 2009. All of the combined company's mines are located within attractive mining jurisdictions. All dollar figures are in Canadian dollars, unless otherwise stated.
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Highlights of the Transaction
The Transaction creates a new intermediate gold company with operating cash flow and an impressive pipeline of development stage assets. Upon completion of the Transaction, the combined company will have:
- Proven and probable gold reserves of 3.2 million ounces, measured and indicated gold resources of 4.9 million ounces and inferred gold resources of 3.0 million ounces;
- Proven and probable silver reserves of 65.3 million ounces, measured and indicated silver resources of 15.8 million ounces and inferred silver resources of 2.6 million ounces;
- Proven and probable copper reserves of 986 million pounds, measured and indicated copper resources of 2.5 billion pounds and inferred copper resources of 918 million pounds;
- Estimated gold production of approximately 297,000 ounces in 2008 expected to increase to 335,000 ounces in 2009;
- Production growth through the development of New Afton, El Morro and the exploration of the combined company's extensive land positions;
- Estimated cash costs of approximately US$340 per ounce of gold, net of by-product credits, in 2008;
- Aggressive growth strategy funded by approximately $500 million in cash and short-term investments (including the potential cash proceeds from the exercise of in-the-money options and warrants), $120 million in investments, and significant operating cash flow;
- Proven board of directors with experience financing, developing and operating open pit and underground mines; and
- Significant leverage to the current gold price environment through unhedged production.
Upon completion of the Transaction, the combined company will have approximately 235 million common shares issued and outstanding plus in-the-money options and warrants, of which former Metallica Resources shareholders will own 45.7% and former Peak Gold shareholders will own 37.8% of the combined company.
Management and Directors
Upon completion of the Transaction, Robert Gallagher, currently Chief Executive Officer of Peak Gold, will assume that role for the combined company. The board of directors will be composed of Clifford Davis, Robert Gallagher, Pierre Lassonde, Craig Nelsen, Paul Sweeney and Ian Telfer.
Richard Hall, President and Chief Executive Officer of Metallica Resources, stated: "The diversified production profile of the combined company, the financial resources to fund the development of the El Morro project and the proven experience of the board of directors makes this a compelling opportunity. We are excited about the prospects for growth and the opportunities this transaction presents for all of Metallica Resources' stakeholders."
Clifford Davis, Chairman and Chief Executive Officer of New Gold, added: "This merger adds immediate gold production and positive cash flow to the company during the New Afton mine development period. It provides the financial resources to fund the capital requirements of the company and ensures that the New Afton mine will become a significant contributor to the long-term success of the new combined entity."
Robert Gallagher, President and Chief Executive Officer of Peak Gold, added: "This merger increases our exposure to the current commodity price cycle and adds significantly to Peak Gold's long-term production profile. The financial strength of the pooled balance sheets and the expertise of the management teams will allow the combined company to pursue global growth opportunities and fill the void in the intermediate gold producer segment of the market. This merger will increase overall shareholder value and provide greater sustainability and growth for the future. We are excited about the opportunities this transaction presents to our collective shareholders and see it as a step towards building a superior intermediate gold mining company."
Compelling Combination
The combination will bring significant benefits to each of the companies and their shareholders. The boards of directors of Metallica Resources, New Gold and Peak Gold have each unanimously supported the proposed combination.
For Metallica Resources, the Transaction:
- Diversifies gold production with multiple producing mines;
- Enhances production growth profile in the medium term;
- Provides shareholders with a significant stake in the combined company; and
- Ensures availability of the necessary funding for the development of El Morro.
For New Gold, the Transaction:
- Adds quality assets to New Gold's long-term growth plan;
- Delivers immediate cash flows from producing gold mines;
- Increases New Gold's leverage to the current price environment; and
- Provides sufficient funding to bring the New Afton project into production.
For Peak Gold, the Transaction:
- Improves production profile through diversification of producing assets;
- Significantly increases reserves and resources;
- Increases exposure to the strong commodity cycle;
- Broadens value growth spectrum with development and exploration stage assets; and
- Provides shareholders with a significant stake in the combined company.
Management and the board of directors of all three companies believe the Transaction will provide the shareholders of each company the opportunity to participate in the future growth of a larger and more established company with a broader range of prospects, a more diversified asset base and a management team with the ability to execute.
Transaction Details
The Transaction is subject to the completion of confirmatory due diligence, definitive documentation, regulatory approvals and obtaining a minimum two-thirds shareholder approval at special meetings of the shareholders of each of Metallica Resources and Peak Gold and majority approval at a special meeting of the shareholders of New Gold. The obligations of Metallica Resources and Peak Gold are also conditional upon New Gold obtaining waivers or amendments to certain terms and conditions of its $237 million unsecured series D notes.
Under the terms of the Transaction, shareholders of Metallica Resources will receive 0.9 common share of New Gold for each common share of Metallica Resources held (the "Metallica Resources Exchange Ratio"). Each outstanding Metallica Resources convertible security will entitle the holder thereof to receive a convertible security of New Gold which will, upon conversion, be converted into that number of common shares of New Gold based on the Metallica Resources Exchange Ratio. Based on the closing price of New Gold shares as at March 28, 2008, the trading day prior to the announcement of the Transaction, the offer values Metallica Resources at $751 million on a fully diluted in-the-money basis. This represents a premium of:
- 12.7% to Metallica Resources' closing price on March 28, 2008, the trading day prior to the announcement
- 25.5% to the 20-day volume weighted average price of Metallica Resources and New Gold shares prior to the announcement
Shareholders of Peak Gold will receive 0.1 common share of New Gold for each common share of Peak Gold held (the "Peak Gold Exchange Ratio"). Each outstanding Peak Gold convertible security will entitle the holder thereof to receive a convertible security of New Gold which will, upon conversion, be converted into that number of common shares of New Gold based on the Peak Gold Exchange Ratio. Based on the closing price of New Gold shares as at March 28, 2008, the trading day prior to the announcement of the Transaction, the offer values Peak Gold at $622 million on a fully diluted in-the-money basis. This represents a premium of:
- 14.9% to Peak Gold's closing price on March 28, 2008, the trading day prior to the announcement
- 13.9% to the 20-day volume weighted average price of Peak Gold and New Gold shares prior to the announcement
Board of Directors' Recommendations
The board of directors of each company have received a fairness opinion with respect to the Transaction consideration (subject to the completion of definitive documentation) and are recommending approval of the Transaction by their respective shareholders. The respective boards of directors have unanimously approved the Transaction. All of the directors and senior officers of each of Metallica Resources, New Gold and Peak Gold have indicated that they intend to vote their respective shares of Metallica Resources, New Gold and Peak Gold in favour of the Transaction.
The letter agreement includes a commitment by each of Metallica Resources, New Gold and Peak Gold not to solicit alternative transactions to the proposed Transaction. In the event that a party enters into an agreement to effect an acquisition proposal that is different from the Transaction, then such party is obligated to pay to the other parties an aggregate amount equal to $22 million in the event Metallica Resources is the terminating party, $8 million in the event New Gold is the terminating party, and $18 million in the event Peak Gold is the terminating party as a termination payment. Each party has also been provided with certain other rights customary for a transaction of this nature, and New Gold has the right to match competing offers made to Metallica Resources or Peak Gold.
Transaction Structure
The Transaction is expected to be structured as a plan of arrangement under the Canada Business Corporations Act between Metallica Resources and a newly formed, wholly-owned subsidiary of New Gold and as a plan of arrangement under the Business Corporations Act (British Columbia) between Peak Gold and a newly formed, wholly-owned subsidiary of New Gold.
Advisors and Counsel
Metallica Resources' financial advisor is Canaccord Capital Corporation and its counsel is Stikeman Elliott LLP. New Gold's financial advisors are GMP Securities L.P. and Macquarie Capital Markets Canada Ltd. and its counsel is Fraser Milner Casgrain LLP. Peak Gold's financial advisor is Paradigm Capital Inc. and its counsel is Cassels Brock & Blackwell LLP.
Conditions
The Transaction is subject to the entering into of definitive agreements among the parties on or before May 9, 2008, the preparation and mailing of a joint information circular, and the holding of special meetings of each company's shareholders. The parties expect to complete and mail the joint information circular in early June 2008 and plan to hold the special meetings in late June 2008. The Transaction is expected to close in early July 2008.
Farwest, Not that their word is gospel, but here are two research reports that puts a target price on STP.V of $3 and $3.50 respectively.
http://www.shpacific.com/wp-files/STP-CanaccordFEB08.pdf
http://www.shpacific.com/wp-files/STP-Macq.Res.pdf
Also, Don Coxe in his latest call (http://events.startcast.com/events/199/B0003/code/eventframe.asp)sounds quite bullish (41" mark on the call) on oil sands. He addresses this in the Q&A following the call. Current weakness in oil sands stocks is due to the concerns on the environmental effects of oil sands extraction and the regulations that may be put on such projects. However, Coxe seems to believe that high prices for oil will ensure that oil sands resources will ultimately get developed.
Now you may have a point that they are understating their costs. However their 219 sq. miles of oilsands leases within the 2nd largest hydrocarbon deposit in the world is a key strategic asset in this era of high oil prices. With a market cap of just $90 million+ for this company that has $18 million of working capital and this key strategic asset, the SP seems quite undervalued. They have completed their winter drilling program and the resulting resource evaluation which is expected to be completed by June end is likely to provide a near term boost to the SP when it is made public. JMHO GLTA.
Nosleep, there's always the risk that shareholders vote against the proposal or for whatever reason the transaction does not close successfully. Therefore, $0.02 is not guaranteed. That's the market asigning a value to that risk currently. As more information comes out that gap should close (or widen). I have a few shares with an average price of $0.30 and have a sell order in 1 cent below the offer price.
PCE.V Getting taken out.
http://biz.yahoo.com/iw/080327/0380591.html
KELOWNA, BRITISH COLUMBIA--(MARKET WIRE)--Mar 27, 2008 -- PACIFIC ASIA CHINA ENERGY INC. ("PACE" or the "Company") (CDNX:PCE.V - News) today announced that it has entered into an Arrangement Agreement with a Green Dragon Gas wholly owned subsidiary, Greka China Ltd. ("Greka") under which Greka, through a wholly-owned British Columbia subsidiary, will acquire all of the Company's outstanding shares at a price of $0.38 per share in cash (the "Transaction"). The total value of the Transaction is approximately CDN$35.18 million.
ADVERTISEMENT
This all-cash Transaction for 100 percent of the Company's shares represents an approximate 60% premium to the Company's last traded date on the TSX Venture Exchange, Thursday, March 20, 2008.
The Transaction has been unanimously approved by the Company's Board of Directors. The Company's Board of Directors has also resolved to recommend to shareholders that they vote in favour of the Transaction. In determining to recommend the Transaction to the Company's shareholders, the Board of Directors considered a number of factors and engaged Haywood Securities Inc. ("Haywood") to prepare a fairness opinion in relation to the Transaction. Haywood has provided a fairness opinion to the Board of Directors of PACE indicating that, subject to its review of all formal documentation and subject to the assumptions and conditions set forth in such opinion, the consideration to be received by PACE shareholders is fair from a financial point of view.
About the Transaction
The Transaction will be carried out by way of a statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia), and must be approved by the applicable court and by 66 2/3 percent of the votes cast by holders of the Company's shares. All warrants and options of the Company are to be cancelled under the plan of arrangement and the arrangement is also subject to 66 2/3 of votes cast by all holders of warrants, options and shares voting as a single class. The completion of the Transaction is also subject to customary closing conditions, including regulatory approvals and completion of satisfactory due diligence. The Transaction is expected to close on May 23, 2008, shortly after receipt of shareholder and court approvals.
Details regarding these and other terms of the Transaction are set out in the Arrangement Agreement, which will be filed by the Company on SEDAR and will be available on the SEDAR website at www.sedar.com. Further information regarding the Transaction will be contained in a proxy circular that the Company will mail to holders of its common shares in connection with the special meeting of shareholders to be held to approve the Transaction. It is expected that these materials will be mailed in late April 2008 for a meeting to be held in late May 2008. Once mailed, the proxy circular will be available at www.sedar.com. All shareholders are urged to read the proxy circular once it is available.
Shareholder Support Agreements
The Company's directors and officers, who collectively hold approximately 25 percent of the outstanding common shares of the Company, have entered into lock up agreements with Greka to vote their shares in favour of the Transaction, subject to their ability to withdraw such support in the event that the Arrangement Agreement is terminated.
Financial and Legal Advisors
Haywood Securities Inc. is acting as financial advisor to the Company with respect to the Transaction. The Company's legal advisor is Blake, Cassels & Graydon LLP.
Green Dragon Gas
Green Dragon Gas (GDG.L) is a vertically integrated gas supplier committed to providing optimum shareholder returns through the execution of an environmentally progressive niche business plan. Green Dragon's wholly owned subsidiary, Greka China Ltd. (Greka), is a gas supplier based in China with a focus on the exploration, development, production, distribution and sales of natural gas from coal seams, commonly known as coal bed methane or CBM. It expects to generate its own CBM supply from three projects in Shanxi province, one project in Jiangxi province and one project in Anhui province covering acreage holdings with an aggregate area of 6620km3 and an estimated 18.1 Tcf of GIP in aggregate. Greka expects to distribute the CBM production in these projects to its customers mainly in the form of CNG by trucks and to a lesser extent, via pipelines in the form of PNG.
About the Company
PACIFIC ASIA CHINA ENERGY INC. is a Canadian based resource company specializing in the strategic development of Coal Bed Methane projects in China, CBM drilling and coal degasification through its 50% owned subsidiary, PACE MITCHELL DRILLING CORP. Common Shares of PACIFIC ASIA CHINA ENERGY INC. are listed on the TSX Venture Exchange under the symbol "PCE".
Here's the transcript of the GORO presentation from SA
http://seekingalpha.com/article/70078-gold-resource-corporation-wall-street-analyst-forum-transcript?source=yahoo