checkmate28....re CPE
You have the facts about right. The issues with CPE are the hedges that are going to drag on oil earnings for the rest of the year. They are barely into the $30's in oil/barrel due to their poor hedging in 2003. Ngas hedges are ok. They also dropped in reserves at year end and need some exploration success to boost reserves. It took them longer than many thought to get back to q2 production and profit levels. It looks like q1 should be closer.
In their most recent guidance the company said they are going to charge themselves taxes but not pay them. This will lower eps by 30%. That will bring the eps down into the .30-.38 range instead of .50 to .55.
Their latest exploration, Pronghorn, didn't go well. They had trouble in drilling and will try to redrill before the end of the year. This was a nice prospect and could have made a nice addition to production and reserves.
Overall CPE needs to produce good eps/cashflow for q1 and have some drilling success. They haven't reported any results so far this year so apparently they haven't hit anything of significance in their early drilling. They need some good wells to come in at North Medusa, Bob North & Entrada as well as their own operation at High Island.
I am surprised by the weakness but may have underestimated the market's dislike for mgmt. The hedging takes a long time to go away and mgmt was defensive about it during the last call. At this point, the best way for them to fix things is to shut up and perform. I am continuing to hold until I see how things are going in 2005 drilling and how q1 shapes up. Good luck, conference call next Tuesday. Bobwins
Market Data 
Markets 
AI
