Friday » January 30 » 2009
Natural gas relief by 2010: report
Dina O'Meara
Calgary Herald
North American natural gas markets are expected to improve by 2010 as storage surpluses get drawn down and demand makes a slow recovery along with the economy, according to a new energy overview.
Peters&Co. predicts natural gas prices will remain muted until the end of the year as the United States economy struggles to pull itself out of a recession and fuel inventories fall.
"The price of natural gas will likely remain under pressure until we see a material change in U. S. domestic supply or demand," the energy brokerage said in Tuesday's report.
After hitting a high of $13.58 US last July, natural gas futures have averaged $5.37 US per million British thermal units year-to-date, with only the December contract prices at or above $6 per mmBTU.
Spot deals at the benchmark AECO-Chubarearound$5.69 per thousand cubic feet, with summer pricing at $5.73 per mcf, and 2009-10 winter pricing at $7.44 per mcf.
The energy investment broker-age house forecast a 1.125 trillion cubic foot drop in natural gas demand between January and November this year, with a 625 billion cubic foot supply decrease, driven by poor economics as industry and producers cut back.
However, as the economy revives and industrial demand revs up again, prices should start shifting upward, the report stated.
"While spot natural gas prices are currently depressed and will likely remain so for the remainder of the winter, there is some hope that equilibrium between supply and demand will begin to develop over the summer with our forecast for supply declines to catch up with demand shortfalls by the beginning of the 2009-10 withdrawal season," according to the report.
Canadian production is expected to fall by 700 million cubic feet this year and another 400 mmcf in 2010. The decrease will be driven by natural decline rates, around 21 per cent a year, steep initial production rate drops in the 60 per cent range, and a drop in new wells drilled, Peters &Co. said.
The number of new wells in the U. S. are forecast to fall about 15 per cent from current levels --already down 23 per cent from last summer--on poor pricing and tight budgets. Based on those numbers, supply could fall by around 2.5 bcf per day by yearend 2009, or 370 bcf, January to October.
The wild card in the equation could be the number of new wells that have been drilled but not completed and tied into a pipeline system this year.
A backlog of wells were a strong offset to Canadian production de-clines over the past two years, mitigating the pace of supply contraction.
"If the same situation exists in the U. S. the pace at which sup-ply declines could obviously be tempered," the report said. "In addition, in periods of low prices, operators generally revert to more recompletion activity in existing well bores, which could also bolster supply."
Production in the U. S. rose about seven per cent last year, while industrial demand, the high-est consumer of natural gas, fell. On this side of the border, production fell on natural declines and a drop in drilling.
Canadian storage levels currently are about two per cent lower than last year at the same time, affected by declining production, with U. S. storage down one per cent from last year. Withdrawals this winter are about 852 bcf compared with one trillion cubic feet last year.
© The Calgary Herald 2009
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Phantom Alert For Your GPS In Canada and USA
Friday, January 30, 2009
Natural gas relief by 2010: report
Thursday, January 29, 2009
Pumped up: Why gasoline engines are here to stay
January 29, 2009 at 12:00 AM EST
Plans to develop electric cars, plug-in hybrid cars, fuel-cell cars, super-clean diesels, perhaps diesel hybrids and other exotic technologies — impressive and far-sighted as they are — are overshadowing the very real but less exotic steps the industry is taking to improve fuel economy and reduce emissions right now.
By "now," we are talking about the next 10-20 years. During that time, the internal combustion engine will keep dominating the automobile world. Exotic technologies are interesting, but the reality is that nothing is ready to unseat the gasoline-powered internal combustion engine.
On the contrary, the auto industry keeps finding ways to squeeze more efficiency out of gasoline engines.
Take the upcoming 2010 Chevrolet Cruze compact car. The Cruze, about the size of a Ford Focus or a Toyota Corolla, but roomier inside than both, will have one of the smallest engines on the market. Yet the 1.4-litre turbo will deliver the performance of a larger engine with fuel economy of 40 miles a gallon (U.S.) or about 5.9 litres/100 km.
More developments and refinements of this sort are coming, and soon, too. Auto makers are working on "twin charging," for instance. That uses two turbochargers or a turbocharger paired with a supercharger, to get more power and greater fuel efficiency out of smaller motors.
In fact, GM, Ford, and others, are launching big initiatives that involve tweaking internal-combustion engines with turbochargers and a technology called gasoline direct-injection. Their goal: make fuel-stingy small engines perform like big ones.
Ford's Derrick Kuzak, the head of all product development at the company, says his company's EcoBoost technology makes smaller engines perform like bigger ones, with no fuel economy penalty.
With EcoBoost, Ford uses turbochargers and direct injection to cut fuel consumption by up to 20 per cent and limit greenhouse gas emissions without any loss of performance.
"We are going to have 500,000 vehicles in the next five years that will have this technology," says Kuzak.
Direct injection makes fuel burn more efficiently by squirting it straight into the combustion chamber, instead of mixing it with air in an intake port.
Turbos are tiny windmills spun by otherwise-wasted exhaust. The turbo runs a compressor that pushes air into the combustion chamber where it mixes with fuel. The enhanced air/fuel mixture develops more power without a large fuel economy penalty.
EcoBoost will make its debut in the Lincoln MKS later this year. Its twin-turbo, 3.5-litre V-6 will have 340 horsepower. That's the horsepower equivalent of a V-8. By 2013, Ford says it will offer EcoBoost engines on 90 per cent of its models.
At GM, direct-injected, turbocharged engines are already sweeping through the automaker's lineup. The 2.0-litre, 260-horsepower, four-cylinder engine in the Pontiac Solstice and Saturn Sky sports cars has this technology. The same engine is in the SS version of the Chevrolet HHR small sport utility and the Chevy Cobalt SS.
At Mazda, the CX-7 crossover has the same 2.3-litre, turbocharged, four-cylinder engine with direct gasoline injection as the high-performance MazdaSpeed3. A 2.0-litre, turbocharged, four-cylinder with direct gasoline injection powers the Audi A3 five-door hatchback, A4 sedan and TT sports car.
Boosting engine performance with turbos and direct injection is a common-sense way to increase fuel economy. A gas engine modified in this way can grab a 20-per-cent fuel economy gain, while hybrids typically deliver a 30 per cent fuel savings, depending on the mode.
What really stands out, though, is the cost. Adding direct injection and turbocharging to an internal-combustion engine typically costs an auto maker about $1,000 (U.S.) per vehicle.
By comparison, the cost premium for a clean-diesel engine is at least $3,000, if not more, and gas-electric hybrid technology adds at least $4,000 to the cost of producing a vehicle (all figures in U.S. dollars).
The wild card in determining which technology makes the most sense: the price of fuel. In the last year, for instance, it's been all over the map, with oil closing in on $150 a barrel last year, only to fall to less than $40 a barrel recently.
Unpredictable fuel prices make it tough to make firm predictions, but Kuzak estimates that if oil goes back up to the levels seen last summer, the EcoBoost system will pay for itself in gas savings in less than three years for drivers who log about 24,000 km a year.
Some estimate a seven-year payback for diesel engines and 11-12 years for hybrids, though the cost of diesel engines and hybrids are coming down and, again, fuel prices are unpredictable.
Beyond engines, manufacturers are ratcheting up the number of gears in transmission to boost fuel economy. It is now common to see five- and six-speed automatic transmissions in even the most affordable vehicles.
Luxury makers have gone further by putting seven- and eight-speed automatics into their top-of-the-line cars. Mass-market vehicles are next to get those automatics.
Other new fuel-saving transmissions include the twin clutch and the continuously variable transmission (CVT). The CVT improves fuel economy by 5 per cent or so over a more traditional automatic.
At the same time, auto companies and suppliers are making real gains in improving fuel economy with better electronic controls and electrical (rather than mechanical) systems to help reduce fuel consumption and vehicle emissions.
For instance, Hyundai's new 2009 Elantra Touring has a base price of less than $15,000, yet it has electric power steering that eliminates the engine pumping losses that dog hydraulic power steering systems. The fuel economy gain is not great, perhaps 1-2 per cent, but it's very real. Most new models now come with electric power steering, regardless of vehicle price.
Auto makers and their suppliers are also rolling out other off-the-shelf technologies that help vehicles gain a little fuel efficiency here, a little there.
Take low-rolling-resistance tires. They use different tread patterns and additional silica in the tread to reduce the fuel-consuming forces that work on tires: air or wind resistance, inertia when accelerating, gravity when driving uphill, internal friction, for instance, in the transmission and the general rolling resistance that occurs when the rubber hits the road.
Then there is the stop-start system. It automatically turns the engine off when a vehicle stops, then restarts the engine when the driver takes his foot off the brake. A stop-start feature can produce a 5-per-cent fuel saving by essentially eliminating idling.
The Mini Cooper sold in Europe offers stop-start and it is expected to make its way to Canada in the future. Mazda is likely to offer stop-start next year on some models.
Meanwhile, cylinder deactivation systems have been around for years. They shut down some cylinders when they are not needed by stopping the flow of fuel to those cylinders. So, eight- and six-cylinder engines can operate in a four-cylinder mode, for instance.
GM, Chrysler and Honda have all pushed this technology into mainstream vehicles such as the Chevy Impala and Honda Pilot. The fuel saving is estimated at about 7 per cent.
Then there is continuously variable valve timing. This technology fine-tunes the operation of valves that control the flow of air and fuel into the cylinders. When and how long the valves open (timing), and how much the values move (lift), affect engine efficiency.
By optimizing timing and lift settings for high and low engine speeds, it is possible to get as much as a 5-per-cent fuel saving. Almost every new engine introduced these days has variable valve timing.
Auto makers also are refining vehicle designs to maximize aerodynamics, thus cutting down on wind resistance and improving fuel economy.
Finally, lighter materials such as plastic and aluminum are replacing heavier steel components to reduce vehicle weight.
All these enhancements and others do not require a massive retooling of auto manufacturing and supplier factories, and they do not need a massive overhaul of our refuelling infrastructure.
None requires rethinking the electric grid, or building battery recharging stations or battery swap centres. None presents the challenge of being supported by a hydrogen refuelling infrastructure. And all these technologies are do-able and affordable.
It's great to dream big, to imagine electric cars, plug-in hybrids, fuel cell cars and the like, but today's reality is less gaudy and eminently practical.
The silver bullet on fuel economy and emissions is not a bullet at all, but a lot of little shotgun pellets that together hit their target to make cars more efficient, less thirsty and less dirty.
So much for the recent winning streak
The streak dies
RTGAM
So much for the recent winning streak that had been promising to put a bullish spin on North American stocks. On Thursday, major indexes handed back most of the gains won during Wednesday's upbeat session and put an end to four consecutive days of higher closes.
The setback will also likely make January a writeoff for the stock market, with just one trading day left in the month to erase substantial losses so far this year.
The Dow Jones industrial average closed at 8149.01, down 226.44 points, or 2.7 per cent. The broader S&P 500 closed at 845.14, down 28.95 points, or 3.3 per cent. The index is down 6.4 per cent this year.
Clearly, investors are willing to do 180-degree turns on financials these days. On Wednesday, they entertained hopes that the U.S. government will soon create a so-called bad bank to absorb the toxic assets of struggling financial firms, leaving their balance sheets healthier and making the companies more likely to lend money.
On Thursday, a report showed that new-home sales plunged 14.7 per cent in December, dashing hopes for a recovery in the devastated U.S. housing market - which is key to stability in the financial sector. As well, tumbling durable goods orders suggested that the demand for big-ticket items continues to crumble
Needless to say, financials led the selloff, with Bank of America Corp. down 8.3 per cent and Citigroup Inc. down 7.4 per cent. Wells Fargo & Co., which had surged more than 30 per cent on Wednesday, sank 11.4 per cent on Thursday.
However, the selloff was widespread, with 27 of the 30 names in the Dow falling. General Motors Corp. fell 7 per cent after Ford Motor Co. reported a fourth-quarter loss of $5.9-billion (U.S.)., General Electric Co. fell 5.8 per cent and Pfizer Inc., which recently made moves on Wyeth in a $68-billion deal, fell 2.1 per cent.
In Canada, the S&P/TSX composite index closed at 8762.76, down 143.47 points, or 1.6 per cent. Financials were among the biggest drags on the index, with Manulife Financial Corp. down 6.1 per cent, Toronto-Dominion Bank down 5.7 per cent and Royal Bank of Canada down 4.3 per cent. Energy stock were also generally weak, despite the price of crude falling only slightly, to $41.44 a barrel. Suncor Energy Inc. fell 4.1 per cent and EnCana Corp. fell 3.6 per cent.
Among the winners: Gold producers surged, following a spike in the price of gold to $906.50 an ounce, up $16.50, as investors sought refuge from the rest of the stock market. Barrick Gold Corp. rose 7.2 per cent and Goldcorp Inc. rose 6.9 per cent.
Copyright 2001 The Globe and Mail
Wednesday, January 28, 2009
No bad news here
Investors weren't in any mood Wednesdy to hear about the negative forecasts of the "experts," but were more than happy to buy stocks in anticipation of big stimulus cheques and bailout plans, sending North American indexes sharply higher.
The International Monetary Fund released its latest forecast for global economic growth, shredding earlier projections of a modest downturn and incorporating a new vision of real trouble ahead. The U.S. economy is now projected to contract by 1.6 per cent in 2009, as against an earlier forecast of a decline of 0.7 per cent. For Canada, the new forecast is for a contraction of 1.2 per cent, down from 0.3 per cent growth. The global economy is expected to slip deeper into recession.
Meanwhile, the U.S. Federal Reserve ramped up the grim talk in its latest monetary policy statement, released in the afternoon.
"Information received since the committee met in December suggests that the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending," the Fed said. "Furthermore, global demand appears to be slowing significantly."
You wouldn't know it from stock market moves, though, which instead reflected hopes for a $900-billion (U.S.) stimulus package from the U.S. administration and the creation of a "bad bank" to absorb the toxic assets of struggling U.S. financial firms.
The Dow Jones industrial average closed at 8375.45, up 200.75 points, or 2.5 per cent. The broader S&P 500 index closed at 874.09, up 28.38 points, or 3.4 per cent. It was the index's fourth gain in four trading days.
Financials were the big winners for the day. Wells Fargo & Co., which reported a loss of $2.55-billion in the fourth quarter but said its dividend was safe, surged 30.9 per cent, JPMorgan Chase & Co. rose 10.4 per cent and Bank of America Corp. rose 13.7 per cent.
In Canada, the S&P/TSX composite index closed at 8906.23, up 146.60 points, or 1.7 per cent. There, financials also stormed higher on the premise that some degree of risk surrounding the sector was about to be lifted, thanks to moves in the United States. Toronto-Dominion Bank rose 6.7 per cent and Bank of Nova Scotia 5.3 per cent.
Energy stocks were mixed, after the price of crude oil rose 58 cents, to $42.16 a barrel. EnCana Corp. rose 4.9 per cent and Talisman Energy Inc. rose 1.3 per cent, but Canadian Oil Sands Trust slipped 3.3 per cent.
Gold producers did not fare well, with the price of gold falling to $888.20 an ounce, down $11.30. Barrick Gold Corp. fell 3.5 per cent and Goldcorp Inc. fell 4.6 per cent.
Copyright 2001 The Globe and Mail
Tuesday, January 27, 2009
Houses QEC,CRO,TLM + 200k Cross
A solid base is forming for QEC at 1.60
Research Cap 200k Cross
1.62
0.02
200,000
83 Research Cap
83 Research Cap
K
Saturday, January 24, 2009
Cro gathering an audience yet again for - a run to .25-.30 cents this year!
- The drill program which comprised our 253 million dollar property is open at depth and further drilling could significantly increase the resource. Some of our strongest results were on outer edges of the drill zone. De-watering of the 2500 meter mine shaft will allow them to get at these areas. The intersection I speak of is the 7% nickel over 5 meters that intersection comes from the end of the drill core. Further exploration could offer up amazing results. 0 summer 2008 drill results out, any significant finds in mine ready atikocan or kenora/dryden properties will lift stock.
- The company has contractual agreements with Opiwica explorations (OPW) on the TSX.V to mill there major gold and copper find with in close proximity of Canadian Arrows Planned site. Mining could begin on both projects in early 2010. This represents earnings and is a good partnership for a company seeking to be the next significant Nickel Copper producer in Canada.
- Canadian Arrow has the ability to produce nickel in its mine at 3.47 per pound nickel. That kind of number is unheard of in comparison to other mines. With production scheduled for early 2010 (around the same time our economy should be significantly rebounding) what if nickel prices return back to 15 dollars per pound? This site will look like a gem to any investor! (plus the property would be worth about 400mil at 15 dollars per pound nickel.
This is just a few of the key points that I believe make this company look attractive. If my predictions are correct we will see a significant rebound to normal multiples over the course of the next couple of months and with any significant news pertaining to my points and our sp and volume will be sent soaring. JV with cash on the books and abilitiy to help put project into production will send our sp back to .50 if not higher! I am Bull on Canadian Arrow mines.
Thursday, January 22, 2009
Markets Oversold But...
Wednesday, January 21, 2009
Tuesday, January 20, 2009
Obama Speech Transcript
January 20, 2009
Transcript
Barack Obama’s Inaugural Address
Following is the transcript of President Barack Obama’s Inaugural Address, as transcribed by CQ Transcriptions:
PRESIDENT BARACK Thank you. Thank you.
CROWD: Obama! Obama! Obama! Obama!
My fellow citizens: I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors.
I thank President Bush for his service to our nation...
(APPLAUSE)
... as well as the generosity and cooperation he has shown throughout this transition.
Forty-four Americans have now taken the presidential oath.
The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.
So it has been. So it must be with this generation of Americans.
That we are in the midst of crisis is now well understood. Our nation is at war against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age.
Homes have been lost, jobs shed, businesses shuttered. Our health care is too costly, our schools fail too many, and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
These are the indicators of crisis, subject to data and statistics. Less measurable, but no less profound, is a sapping of confidence across our land; a nagging fear that America's decline is inevitable, that the next generation must lower its sights.
Today I say to you that the challenges we face are real, they are serious and they are many. They will not be met easily or in a short span of time. But know this America: They will be met.
(APPLAUSE)
On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.
On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.
We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.
(APPLAUSE)
In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less.
It has not been the path for the faint-hearted, for those who prefer leisure over work, or seek only the pleasures of riches and fame.
Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long, rugged path towards prosperity and freedom.
For us, they packed up their few worldly possessions and traveled across oceans in search of a new life. For us, they toiled in sweatshops and settled the West, endured the lash of the whip and plowed the hard earth.
For us, they fought and died in places Concord and Gettysburg; Normandy and Khe Sahn.
Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.
This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions -- that time has surely passed.
Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.
(APPLAUSE)
For everywhere we look, there is work to be done.
The state of our economy calls for action: bold and swift. And we will act not only to create new jobs but to lay a new foundation for growth.
We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.
We will restore science to its rightful place and wield technology's wonders to raise health care's quality...
(APPLAUSE)
... and lower its costs.
We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age.
All this we can do. All this we will do.
Now, there are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans. Their memories are short, for they have forgotten what this country has already done, what free men and women can achieve when imagination is joined to common purpose and necessity to courage.
What the cynics fail to understand is that the ground has shifted beneath them, that the stale political arguments that have consumed us for so long, no longer apply.
MR. The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.
Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.
And those of us who manage the public's knowledge will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.
Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched.
But this crisis has reminded us that without a watchful eye, the market can spin out of control. The nation cannot prosper long when it favors only the prosperous.
The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart -- not out of charity, but because it is the surest route to our common good.
(APPLAUSE)
As for our common defense, we reject as false the choice between our safety and our ideals.
Our founding fathers faced with perils that we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations.
Those ideals still light the world, and we will not give them up for expedience's sake.
And so, to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman and child who seeks a future of peace and dignity, and we are ready to lead once more.
(APPLAUSE)
Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with the sturdy alliances and enduring convictions.
They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use. Our security emanates from the justness of our cause; the force of our example; the tempering qualities of humility and restraint.
We are the keepers of this legacy, guided by these principles once more, we can meet those new threats that demand even greater effort, even greater cooperation and understanding between nations. We'll begin to responsibly leave Iraq to its people and forge a hard- earned peace in Afghanistan.
With old friends and former foes, we'll work tirelessly to lessen the nuclear threat and roll back the specter of a warming planet.
We will not apologize for our way of life nor will we waver in its defense.
And for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that, "Our spirit is stronger and cannot be broken. You cannot outlast us, and we will defeat you."
(APPLAUSE)
For we know that our patchwork heritage is a strength, not a weakness.
We are a nation of Christians and Muslims, Jews and Hindus, and nonbelievers. We are shaped by every language and culture, drawn from every end of this Earth.
And because we have tasted the bitter swill of civil war and segregation and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.
To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect.
To those leaders around the globe who seek to sow conflict or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy.
To those...
(APPLAUSE)
To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.
(APPLAUSE)
To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.
And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to the suffering outside our borders, nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.
As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us, just as the fallen heroes who lie in Arlington whisper through the ages.
We honor them not only because they are guardians of our liberty, but because they embody the spirit of service: a willingness to find meaning in something greater than themselves.
And yet, at this moment, a moment that will define a generation, it is precisely this spirit that must inhabit us all.
For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies.
It is the kindness to take in a stranger when the levees break; the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours.
It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.
Our challenges may be new, the instruments with which we meet them may be new, but those values upon which our success depends, honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old.
These things are true. They have been the quiet force of progress throughout our history.
What is demanded then is a return to these truths. What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task.
This is the price and the promise of citizenship.
This is the source of our confidence: the knowledge that God calls on us to shape an uncertain destiny.
This is the meaning of our liberty and our creed, why men and women and children of every race and every faith can join in celebration across this magnificent mall. And why a man whose father less than 60 years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.
(APPLAUSE)
So let us mark this day in remembrance of who we are and how far we have traveled.
In the year of America's birth, in the coldest of months, a small band of patriots huddled by nine campfires on the shores of an icy river.
The capital was abandoned. The enemy was advancing. The snow was stained with blood.
At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:
"Let it be told to the future world that in the depth of winter, when nothing but hope and virtue could survive, that the city and the country, alarmed at one common danger, came forth to meet it."
America, in the face of our common dangers, in this winter of our hardship, let us remember these timeless words; with hope and virtue, let us brave once more the icy currents, and endure what storms may come; let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.
Thank you. God bless you.
(APPLAUSE)
And God bless the United States of America.
(APPLAUSE)
What Is Next For Oil?
by Steve Austin -
It took only 5 months for the price of oil to plummet from $150 to under $40 in the second part of the year. Meanwhile oil consumption did not even decrease 10%, so what is the real cause of this collapse you may ask?
Hedge funds. Let me explain.
Oil Hedge Funds
During the first part of 2008, Western economies were already slowing down noticeably and hedge funds gradually pulled trillions of dollars out of the market and parked them in energy ETFs. At the time Chindia's insatiable thirst for oil and the "decoupling" of east/west economies had many believe commodities were a "sure thing", a sound enough tangible insurance to protect overinflated assets scavenged from made-up bubbles. On top of that, by using leverage, profits were multiplied as oil went up, not a bad deal in a recession.
But when the banking industry collapsed, hedge funds had to raise cash by "deleveraging", liquidating their leveraged energy ETF positions sending the price of oil tumbling. Anecdotally shorting of banking ETFs was suspended by the US Securities Commission during that time but not shorting of energy prices, and the leverage mania soon found an escape route in utrashort oil ETFs, compounding the speed of this downward spiral. By December 2008 the oil price had collapsed 75% and frankly, who would complain about cheap gas these days?
As we enter 2009 the oil landscape has reversed dramatically from a year ago. The price of oil is lower than production costs and new exploration projects are being cancelled. China flush with cash is currently buying all the oil it can get its hands on to pump into its strategic reserves.
Once arrogant OPEC countries are willing to sell oil at any price to fund government programs and prevent political instability.
One constant however is the depletion of major oil fields, worse than predicted at 9.1% year over year as we close 2008. It's a matter of when not if the economy recovers and when it does, expect a strong bounce back in the price of oil.
Oil falls below $34 a barrel
PABLO GORONDI
Tuesday, January 20, 2009
Oil prices fell below $34 (U.S.) a barrel Tuesday on the continued gloomy outlook for global energy demand and as traders sold the expiring benchmark contract due to a lack of space at a key U.S. storage facility.
By midday in Europe, light, sweet crude for February delivery was down $3.14 to $33.37 a barrel in electronic trading on the New York Mercantile Exchange.
The February contract expires Tuesday. Its last official settlement was $36.51 on Friday, as U.S. markets were closed Monday due to Martin Luther King Jr. Day. Nevertheless, electronic trading continued during the holiday and the February contract fell $1.96 to $34.55.
The February contract has fallen about a third in two weeks, in part because burgeoning supplies in Cushing, Oklahoma, the delivery point for the Nymex contract, have left investors with little space to store crude, forcing them to sell.
Traders say some oil firms are storing crude on rented tankers.
“There's too much oil in the world right now, and that oil is trying to find a home,” said Stephen Corry, head of investment strategy for Merrill Lynch in Hong Kong. “We're finding surplus oil is being put in tankers ... and the price of future contracts is higher in order to offset the storage cost.”
Sucden Research in London said that reportedly oil stored in tankers now amounted to about a day's worth of global demand.
Investors have turned their attention to the March Nymex contract, which is trading at $39.87 a barrel, down $2.70 from Friday's close.
In London, the March Brent contract was down 78 cents to $43.72 on the ICE Futures exchange.
“The true price of crude today is somewhere between $40-$45 a barrel,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
Weighing on all the contracts is a severe recession in developed countries and a slump in global oil demand. Hundreds of U.S. companies report fourth quarter earnings this week, and investors are fearing the results could show the economic slowdown is deepening.
“The global economy remains the driver of oil so there's a lot of downward pressure,” Mr. Shum said.
Despite March Nymex crude trading higher than the expiring February contract, investors were not optimistic the premium could be sustained for long.
Trader and analyst Stephen Schork said the current gloomy economic indicators in the United States — such as the rising jobless rate and falling industrial production — did not point to a quick recovery.
“Bottom line, we have high supply and low demand. Why should the March Nymex crude oil not trade below $40 ... or 30?” Mr. Schork wrote in his daily market comment.
Goldman Sachs said Monday the price of oil could fall below $30 a barrel in the short-term before rising to $65 in the fourth quarter.
Investors will also be eyeing the inauguration of President-elect Barack Obama on Tuesday for any hints regarding the government's economic and energy policies.
In other Nymex trading, gasoline futures fell 6.47 cents to $1.1025 a gallon. Heating oil dropped to 10.15 cents to $1.3719 a gallon while natural gas for February delivery slid 22.7 cents to $4.574 per 1,000 cubic feet.
© Copyright The Globe and Mail
Sunday, January 18, 2009
Friday, January 16, 2009
The Worst Investment In The World?
Other changes they would like to see are the credit card companies refusing to process incoming charges from this fraudulent company, or at least immediate process chargebacks on the basis of a fraudulent transaction (rather than a mere contract dispute).
“They’re so slick. They have this veneer of respectability because they have a huge office off the main lobby of the hotel,” said one victim on the RH scam site. RHC does not actually own any of the resorts in their slick, thick catalog. They claim at least part ownership; in fact they nervily claimed in a letter of Dec. 2004 that they had just acquired the “Park Royal Los Cabos”, and also that they had added a “strategic alliance” with Mexicana Airlines so as to offer its members special packages.
In fact, the sales reps for RHC make up anything to get a sale. They offer fictional air packages/discounts/flyer miles; they offer fictional golf packages; and lately they reportedly offer fictional annuities!
Mike, the head of the Yahoo group, Royal Holiday scam, has summed up all the company’s angles very succinctly.
Wednesday, January 14, 2009
BNN Sprott Analyst: Buy QEC
Questerre Updates Quebec Activities
00:41 EST Monday, January 12, 2009
CALGARY, ALBERTA--(Marketwire - Jan. 12, 2009) -
NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) reported today that drilling operations have been successfully completed on the St. David well in the St. Lawrence Lowlands, Quebec.
Drilled to a target depth of 1995m on schedule and budget, St. David is the third well in the four-well farm-in program. The well has been cased as a potential gas producer. St. David was recently logged to evaluate the Utica and Lorraine shale/siltstone zones and the Trenton Black-River group. An analysis of these logs is ongoing to select prospective intervals for stimulation and testing.
Subject to equipment availability, completion and testing will commence after spring break-up. The Company expects the operator will spud the fourth and final well in the program, St. Edouard, in late February.
Questerre also reported on the status of the La Visitation and Gentilly wells in the Lowlands. Completion operations with multiple fracs on the recently drilled La Visitation well are currently underway. On the Gentilly well, the operational issues surrounding the packer have been resolved in order to allow testing of the Lorraine to resume shortly. Questerre anticipates preliminary results from these wells will be available during the second quarter.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "Drilling results on St. David were very positive as we saw promising gas shows in the Utica and Lorraine." Mr. Binnion also commented, "The pilot programs in the Lowlands are rapidly ramping up with several operations underway simultaneously. All these operations are designed to provide extensive technical data critical to assessing the commerciality of the play. We are very pleased that the operator does not compromise in this regard. We believe we remain on track to have an adequate sample of quality results to make a preliminary assessment of the commerciality of the Quebec shales in 2009."
Questerre is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.
This news release does not constitute an offer of securities for sale in the United States. These securities may not be offered or sold in the United States absent registration or an available exemption from registration under the United States Securities Act of 1933, as amended.
FOR FURTHER INFORMATION PLEASE CONTACT:
Questerre Energy Corporation
Anela Dido
Investor Relations
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
© Copyright CCNMatthews
Sign Of The Times= Nortel Bankruptcy
Nortel files for bankruptcy protection
ANDREW WILLIS, JACQUIE McNISH AND MATTHEW HARTLEY
Wednesday, January 14, 2009
Former technology titan Nortel Networks Corp. filed for bankruptcy protection Wednesday, a move that will likely see what was once Canada's great corporate success story broken up and sold to foreign rivals.
Nortel's board of directors was meeting last night to deal with a financial crisis, as the economic downturn translates into a sharp drop in orders from phone company clients. The telecom-hardware manufacturer failed to find buyers for a number of divisions that were put up for sale in September, and faces the prospect of paying $107-million (U.S.) of interest on its debts tomorrow.
“It is an iconic Canadian name and there will be a great national grieving over this,” said one person familiar with Nortel's plans.
The company's already crushed shares plunged further in European trading Wednesday as investors absorbed the development, falling to as little as the equivalent of 35.41 cents Canadian on the Frankfurt Stock Exchange, before inching back to 37.66 cents, down 2.9 cents from Tuesday's close.
Toronto-based Nortel applied for court approval for creditor protection in Delaware Wednesday morning. It was expected to file in Toronto, as well. Nortel executives had no comment yesterday on the company's plans.
Opting for creditor protection marks an incredible fall from grace for a telecom manufacturer that is almost as old as the telephone. Nortel easily qualified as the country's largest company at the peak of the tech boom in 2000, with a $366-billion (Canadian) market capitalization and 95,000 employees.
While still North America's largest telecom equipment maker, Nortel's shares were worth a total of just $192-million yesterday, and the company has 26,000 staff after a bruising series of layoffs over the past eight years. Nortel stock that soared to $1,231 at the peak of the tech bubble – reflecting a recent consolidation in shares – closed yesterday at 38.5 cents on the Toronto Stock Exchange.
Court protection from lenders, and the breakup that will likely follow, would mark the end of chief executive officer Mike Zafirovski's four-year attempt to turn Nortel around. Mr. Zafirovski was parachuted into the top job in 2005 after successful stints at General Electric and Motorola. But he was never able to right a company plagued by a series of accounting scandals – one of his predecessors faces fraud charges – and weakening demand for its products.
While not bankrupt – the company has an estimated $1-billion in its coffers – Nortel is burning though cash at an impressive clip, and has $4.5-billion (U.S.) in long-term debt. Major lenders include JPMorgan Chase, Citigroup and Royal Bank of Canada. Seeking court protection would give the company more latitude in selling or restructuring factories and research facilities. Air Canada, for example, went this route in 2003, continuing to fly while cutting jobs and reworking its debts. Duncan Stewart, an analyst at DSAM Consulting in Toronto, said: “The issue is not whether or not they can pay it. … It's the idea of: If you know you're eventually going to default anyway, why not do it now and keep the … interest payments you would have shelled out?”
Typically, companies do not file for bankruptcy protection until they have drained most of their cash. But the deepening global credit crunch had raised concerns that a troubled company such as Nortel would not be able to raise enough money to finance its operations during bankruptcy proceedings.
The court filing will come as a shock to the company's bondholders, who had expected Nortel to pay its debts this week. Shareholders will likely see their holdings all but wiped out.
As a consequence of filing for protection, Nortel can expect to lose significantly more business, potentially sending the company into a death spiral, analysts say.
The sophisticated equipment made by Nortel carries an expectation from customers – the major phone companies – that the manufacturer will be around to service networks. One of the reasons the auto makers gave last month for resisting calls for them to file for bankruptcy protection was that potential customers would not buy from a manufacturer they did not think would be around to service the vehicles. For the network equipment industry, that fear is justifiably magnified.
When Nortel said in September that it would put its Metro Ethernet Networks division up for sale – it makes hardware that carries Internet traffic – revenue fell on fears of sustainability and service.
Now Nortel faces the prospect of selling additional divisions to pay down debts, all under the supervision of a judge. In addition to selling the Ethernet unit, divisions that could go on the auction block include the carrier networks unit, which sells gear to phone companies, and the enterprise division that sells telecom equipment to businesses. Potential buyers for these units are all foreign: Nokia Siemens Networks, Telefon AB LM Ericsson, Cisco Systems Inc. and China's Huawei Technologies Co. Ltd.
Nortel's storied history in the telecommunications field dates back nearly as far as the telephone itself. The company was founded in 1895 as Northern Electric Manufacturing Company to begin selling telephone equipment to other companies as Canada built out its first telecom network.
Throughout the first half of the 20th century, the company's telecom gear business grew steadily, but Nortel also built telegraphic equipment used on the battlefields of the First World War as well as the first sound system in Canada for talking movies.
In the 1950s, the company developed electromechanical switches, a technology that would allow direct phone calls between cities. Nortel was an early pioneer of satellite technologies in the 1960s and helped build Canada's first cellular telephone networks.
Nortel's fortunes exploded with the dawn of the Internet and the introduction of increasingly sophisticated modems and cellular technologies. At its peak, this one company accounted for nearly one-third of the total value of the TSX; the company was worth more than all six big banks combined.
Now the company is being brought to its knees by the prospect of paying $107-million of interest due to its bondholders this week. However, that is not the only financial deadline facing Nortel. On Dec. 15, the company was given a 30-day waiver from Export Development Canada on the government agency's support for up to $750-million of credit. The deadline on that waiver is today.
With a report from Simon Avery
© Copyright The Globe and Mail
Tuesday, January 13, 2009
QEC + TLM = $$$$
Talisman Energy Plans to Balance Cash and Spending in 2009
07:00 EST Tuesday, January 13, 2009
CALGARY, ALBERTA--(Marketwire - Jan. 13, 2009) - Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) has announced its capital spending plans for 2009. The priorities for the coming year are:
- Preserving financial strength and flexibility in a low price environment.
- Advancing the strategy for long-term growth and building on the success from last year.
- Continuing the focus on efficiency and costs.
The Company has budgeted for exploration and development spending of approximately $3.6 billion in 2009 and plans to fund these capital programs from cash flow and disposition proceeds. Including non-cash lease costs, total capital spending is expected to be approximately $4 billion. Talisman has set these plans assuming a US$40/bbl WTI oil price and a US$5/mmbtu NYMEX natural gas price in 2009.
The Company plans to issue its final 2008 results on March 5, 2009.
"We have assumed what we hope to be a conservative scenario for oil and gas prices in 2009," said John A. Manzoni, President & CEO. "Talisman entered 2009 with a strong balance sheet and our objective this year is to preserve financial flexibility by living within our means and continue to advance our new strategy. We have achieved good progress on the strategy introduced last May and this new direction for the Company is proving to be robust.
"We have significantly more investment opportunities than available cash in the current environment, which allows us to be flexible in where we focus investment. We will concentrate on continued implementation of our strategic priorities, sometimes at the expense of current production, because we believe our strategy will deliver the highest returns over time. Based on our projected investment pattern, 2009 production should be broadly similar to last year, which is expected to come in at about 430,000 boe/d. This shift in spending towards higher quality strategic projects is expected to provide sustainable long-term growth at lower risk.
"We will maintain a flexible approach to spending this year, which will allow us to navigate this dynamic environment. We plan to fund our capital programs from cash generated by operations plus proceeds from confirmed divestments. This includes approximately US$500 million received last week from our previously announced Netherlands sale.
"In line with our objective of focusing the portfolio, last year we sold non core assets comprising around 12,000 boe/d of production with after tax proceeds of around $1 billion. We intend to continue this process, recognizing that sales may be difficult in the current financial environment. We will also be mindful of opportunities created in this commodity price environment where it may be better value to buy than to build.
"While we are still in the process of evaluating our 2008 results, low year-end commodity prices will likely have a significant negative impact on reported reserves, predominantly in the UK. In addition, lower prices, combined with adding substantial amounts of high quality unconventional land in North America, while progressing a number of large international development projects, are expected to result in high reserve replacement costs in 2008. However, we expect the strategic shift to unconventional gas and a focus on larger international exploration targets will lead to a substantial reduction in these costs over time. We also see indications that costs are coming down and we will continue to manage our cost base carefully, both in terms of capital and operating costs, continually looking for opportunities to reduce them.
"The capital program is relatively balanced among: North America (33%); North Sea development (27%); Southeast Asia growth projects (19%); international exploration (18%, including North Sea and Southeast Asia exploration); with the remaining 3% allocated for the rest of the world.
"In North America, spending is expected to be approximately $1.2 billion this year. Spending on unconventional gas programs will account for approximately $1 billion of the total, with about two-thirds of unconventional spending budgeted for the Marcellus and Montney plays. The North American unconventional program will be the primary user of any incremental capital that becomes available through the year either through higher prices or additional non-core asset sales. We are encouraged by the results in our core areas and see unconventional gas as one of the main drivers of long term growth for Talisman.
"North Sea development spending is focused on project developments at Yme in Norway, in addition to the Burghley development and the Auk North and South redevelopment in the UK. We will delay some planned asset sales in the UK in this environment; however, our objective remains to establish the UK as a long term, high quality generator of free cash flow. In Southeast Asia, the emphasis will be on achieving first oil from Northern Fields in the PM-3 CAA, continued development offshore Vietnam and increasing gas sales in Indonesia from Corridor and Tangguh. We continue to look for additional investment opportunities in this low cost, energy rich part of the world.
"We have an exciting exploration program lined up this year with a second well planned for the Kurdistan region of Northern Iraq, appraisal of a previous Talisman discovery in Peru, completion of the Huron-1 well in Colombia and the TR3 well in Norway. In addition, there is an ongoing appraisal and evaluation program in Block 15-2/01 in Vietnam. In total this year, we will participate in 24 exploration and appraisal wells, 11 of which we will operate. Our longer-term objective is to add 150 mmbbls of resources per year at a cost of less than $5/bbl.
"Talisman enters 2009 with a strong balance sheet and a lot of flexibility. We have made significant progress on our strategy in a very short period of time and will continue implementation. I am confident we will exit the year with the Company even better positioned for sustainable growth and value creation."
The 2009 Capital Program
The 2009 capital program supports Talisman's new strategic objectives outlined in May 2008. The Company has achieved significant progress in the past seven months:
- Talisman sold interests in non-strategic properties in North America, Denmark and the Netherlands, with aggregate proceeds of $1 billion.
- In North America, the Company spent $1.4 billion acquiring substantial amounts of high quality unconventional natural gas acreage and drilling approximately 186 gross unconventional pilot and development wells in new areas.
- New projects were brought on in Southeast Asia (Northern Fields gas in Malaysia and Song Doc in Vietnam).
- The Company added new exploration acreage in Colombia, the UK and also acquired interests in two blocks in one of the most prospective exploration areas in the world in the Kurdistan region of Northern Iraq.
North America
As part of the 2008 strategic review, Talisman decided to substantially increase its investment in unconventional natural gas. A total of 186 gross unconventional wells were drilled in new areas in 2008. The Company is continuing pilot programs in a number of areas and moving to development of others. The Company also made significant additions to its already sizeable unconventional land base in 2008.
Talisman plans to spend $1.2 billion in North America in 2009, focusing on projects in areas where the Company has a large, material opportunity base. Approximately 80% of spending will be on unconventional properties, with $710 million allocated to development of the Pennsylvania Marcellus Shale and continued piloting and development of the Montney. Spending on conventional assets in North America will be limited to existing commitments on heritage properties. Although this will impact 2009 volumes, Talisman believes its unconventional opportunities have a better risk/return profile.
Following on its success in 2008 in the Marcellus Shale in Pennsylvania, where Talisman holds 140,000 net acres, the Company plans to move into the development stage. Talisman plans to drill 36 gross horizontal wells in 2009, with up to five rigs drilling by the third quarter. With continued success in Pennsylvania, the program could ramp up to 16 rigs in the area by 2010.
Talisman plans to continue building on its success in the Montney area, with a mix of pilot projects, development and land acquisitions in 2009. Talisman is active in several regions within the Montney. In 2009, the Company plans to drill 49 gross wells, with the possibility of increasing this level with continued success. By year-end, nine rigs will be drilling in the area. Talisman holds 87,000 net acres of land in the Groundbirch area, where it will continue its pilot program in 2009.
Talisman will continue to pilot and prepare its Quebec landholdings for a 2010 drilling program. The Company will also complete its drilling program in West Texas, which was part of the Hallwood transaction entered into in 2008.
Talisman's drilling plans for 2009 include a total of 131 gross unconventional development wells and 29 gross pilot wells. Talisman expects to have a total of 16 unconventional rigs deployed by the end of the year.
Southeast Asia
In Southeast Asia, the Company plans to leverage its successful track record in Malaysia and Indonesia and plans to spend approximately $850 million in 2009, primarily focusing on developing growth projects in the region. The majority of spending will be on development drilling in the Northern Fields in Malaysia, where the Company expects to drill approximately 16 oil and gas wells and on the continued appraisal and development of Block 15-2/01 in Vietnam. Talisman plans to drill three wells on the Block, one appraisal/development well in the basement structure and two exploration wells to test additional prospects.
In Malaysia, Talisman will progress Northern Field Development to first oil in the second quarter of 2009. In Vietnam, sanction for the development of the Hai Su Trang field and for the Hai Su Den early production scheme is expected in the first half of 2009, with first production anticipated in 2012. In Indonesia, the Company expects first production from the Tangguh LNG project in the second quarter of 2009 and will pursue sanction of Suban Phase 3 in the Corridor PSC for first gas sales in 2013. In addition, Talisman will continue to evaluate exploration opportunities in existing Joint Study Agreement blocks as well as licencing rounds.
North Sea
In the North Sea, Talisman plans to spend approximately $1.4 billion in 2009, excluding a non-cash capitalized lease in Norway of $270 million. Of this, approximately $750 million will be spent in the UK and $630 million in Norway, without the non-cash lease. Approximately $235 million will be spent on exploration drilling, which includes two wells to follow-up on the Cayley discovery in the UK.
In Norway, the overall objective is to grow operations through development projects in the near term and through exploration in the mid- to long-term. The cash capital program in Norway is approximately $630 million, of which approximately $340 million will be spent on Yme development and approximately $120 million on exploration. Talisman's development program in Norway includes 13 development wells, nine of which are operated. Seven wells are planned on Yme and two wells each on the Brage and Gyda fields.
In the UK, the overall aim is to hold production flat and continue the UK as a free cash flow generator. Talisman plans development spending of $560 million, including drilling and completing two wells at Auk North, detailed engineering on the Auk South project and commencing the Burghley project. In total, seven new development wells are expected to be drilled in 2009. We have slowed expenditure on a number of projects in order to take advantage of a slowdown in the contracting environment.
North Africa
In North Africa, capital spending is expected to be $66 million for 2009. Talisman anticipates the El Merk development project will be sanctioned in the first quarter of 2009. Development drilling will commence in the second quarter of 2009 and first oil is planned for the first quarter of 2012. At the Ourhoud field, a continuous development drilling program is planned through to mid-2010.
Exploration
Talisman's global exploration strategy is to deliver organic growth to the Company by defining new exploration opportunities within the current asset base and identifying potential future core production areas. Excluding North America, exploration spending in 2009 is budgeted at approximately $660 million. Key wells planned include TR3 and Grevling in Norway, Situche Centrale appraisal in Peru, Huron-1 in Colombia and a second well in the Kurdistan exploration program.
In the North Sea, Talisman plans to support the existing core areas with four operated wells in the UK and three in Norway. In Southeast Asia, Talisman will complete the appraisal program on Block 15-2/01 in Vietnam as well as progressing the evaluation of Pasangkayu, Sageri and the Joint Study agreement blocks in Indonesia.
In South America, Talisman will drill a well to appraise an earlier discovery in Block 64 in Peru. The Company will continue drilling operations of the Huron-1 well in the Niscota Block, drill an additional well in El Caucho and progress the evaluation of the recently awarded blocks in Colombia.
In the Kurdistan region of Northern Iraq, following the first well, which is currently drilling on Block K44, Talisman will drill the second of a three well commitment and acquire additional seismic over Block K39.
Talisman Energy Inc. is an independent upstream oil and gas company headquartered in Calgary, Alberta, Canada. The Company and its subsidiaries have operations in North America, the North Sea, Southeast Asia and North Africa. Talisman's subsidiaries are also active in a number of other international areas. Talisman is committed to conducting its business in an ethically, socially and environmentally responsible manner. The Company is a participant in the United Nations Global Compact and included in the Dow Jones Sustainability (North America) Index. Talisman's shares are listed on the Toronto Stock Exchange in Canada and the New York Stock Exchange in the United States under the symbol TLM.
Financial Information:
All dollar amounts are stated in Canadian dollars, except where otherwise indicated.
Forward-Looking Information
This press release contains information that constitutes "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. This forward-looking information includes, among others, statements regarding:
- business plans for drilling, exploration, appraisal and development and estimated timing;
- estimates of production and production growth;
- expected impact of low year-end commodity prices;
- business strategy and plans, including planned land acquisitions and pilot projects;
- estimated timing and results of new projects, including the timing of new production first sales;
- estimated amounts and timing and sources of capital expenditures;
- outlook for oil and gas prices;
- expected timing of results;
- objectives regarding resource additions and costs;
- expected timing of project sanctioning;
- expected acquisition of seismic; and
- other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance.
The following material assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this press release. Talisman has set its 2009 capital expenditure plans assuming a US$40/bbl WTI oil price and a US$5/mmbtu NYMEX natural gas price. Information regarding business plans generally assumes that the extraction of crude oil, natural gas and natural gas liquids remains economic.
Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks which could cause actual results to vary and in some instances to differ materially from those anticipated by Talisman and described in the forward-looking information contained in this press release. The material risk factors include, but are not limited to:
- the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable facilities outages;
- risks and uncertainties involving geology of oil and gas deposits;
- the uncertainty of reserves and resources estimates, reserves life and underlying reservoir risk;
- the uncertainty of estimates and projections relating to production, costs and expenses;
- potential delays or changes in plans with respect to exploration or development projects or capital expenditures;
- changes in general economic and business conditions;
- fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;
- the outcome and effects of completed acquisitions, as well as any future acquisitions and dispositions;
- the ability of the Company to integrate any assets it has acquired or may acquire or the performance of those assets;
- health, safety and environmental risks;
- uncertainties as to the availability and cost of financing and changes in capital markets;
- risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action);
- competitive actions of other companies, including increased competition from other oil and gas companies; and
- the Company's ability to implement its business strategy.
The foregoing list of risk factors is not exhaustive. Additional information on these and other factors which could affect the Company's operations or financial results are included in the Company's most recent Annual Information Form and Annual Financial Report. In addition, information is available in the Company's other reports on file with Canadian securities regulatory authorities and the United States Securities and Exchange Commission.
Forward-looking information is based on the estimates and opinions of the Company's management at the time the statements are made. The Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change, except as required by law.
Gross Production
Throughout this press release, Talisman makes reference to production volumes. Such production volumes are stated on a gross basis, which means they are stated prior to the deduction of royalties and similar payments. In the U.S., net production volumes are reported after the deduction of these amounts. U.S. readers may refer to the table headed "Continuity of Proved Net Reserves" in Talisman's most recent Annual Information Form for a statement of Talisman's net production volumes by reporting segment that are comparable to those made by U.S. companies subject to SEC reporting and disclosure requirements.
Boe Conversion
Throughout this press release, the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (mcf) of natural gas for one barrel of oil and is based on an energy equivalence conversion method. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalence at the wellhead.
FOR FURTHER INFORMATION PLEASE CONTACT:
Talisman Energy Inc. - Media and General Inquiries:
David Mann
Vice-President, Corporate & Investor Communications
(403) 237-1196
(403) 237-1210 (FAX)
or
Talisman Energy Inc. - Shareholder and Investor Inquiries:
Christopher J. LeGallais
Vice-President, Investor Relations
(403) 237-1957
(403) 237-1210 (FAX)
Email: tlm@talisman-energy.com
Website: www.talisman-energy.com
Businesses Owners Need to be Brave and Bold Richard Branson Says
Businesses Owners Need to be "Brave and Bold" Richard Branson Says
Canadian entrepreneurs recently got the chance to pick the brain of one of the world’s most successful businessmen, Sir Richard Branson. As a follow-up to his appearance at the Small Business Summit presented by American Express on October 21, Branson offered insights and advice on building a successful business in a recent online chat.
“Branson possesses not just a true entrepreneurial spirit but valuable insights on what it takes to achieve business success," said Howard Grosfield, Vice President and General Manager, Small Business Services, American Express Canada & International. "Branson has proven himself as someone who continually draws on the experience and opinions of many to take himself and his business ventures to the next level. This is very much the approach of the many determined Canadian small business owners that American Express works with every day."
The Right Attitude
When it comes to the characteristics of a good business leader, Branson subscribes to the ‘nothing ventured, nothing gained’ philosophy. “To be a serious entrepreneur, you have to be prepared to step off the precipice. If you make a mistake, learn from it and do things better next time,” says Branson, adding that in his most recent book, he’s “written a whole host of traits that make for a good business owner and entrepreneur. Good imagination, willing to take risks, courage and persistence are just a few important characteristics I believe are vital to any entrepreneur’s success.” Business leaders need to be fearless, and unafraid of making mistakes if they want to grow and improve themselves and their businesses. This willingness to try, and potentially fail, is something Branson always looks for in the people he chooses to work with.
The Right Team
In his book, Branson writes about working with an investment advisory committee, which helps review potential business opportunities and ideas. This select team helps Branson filter good business ideas from the less opportune, by listening to the idea submissions, questioning the proposals at length and then advising on the final decision. Branson says that many major Virgin companies, including Virgin Mobile, have been formed through this process.
Running a multifaceted business of any size means that there are numerous competing demands for attention and time, and although Branson acknowledges the importance of working with a team of advisors, he advises business owners to keep their team small, “so you don’t become too far removed from your customers and the core business decisions.”
The Right Ideas
Successful businesses are often inspired by big, bold ideas, but there is no formula for growing creative visions into viable businesses. Branson’s fusion of creativity and business strategy has certainly paid off, but he still insists that even he doesn’t know if a good idea will be successful or not. The difference, Branson says, is a willingness to try new ideas, despite the risk.
“I remember when some of the major record companies turned down Mike Oldfield’s debut album, Tubular Bells and as a result I had the idea that we would set up a record company and release his album under our own Virgin Record label,” says Branson, recalling the beginning on his renowned record label. “Island Records said they would distribute it for us but for a profit. I decided to do it all ourselves, be bold and take a bigger risk for a larger chunk of the upside. Thankfully… it paid off and the album was in the charts for something like five years and sold around two million copies.”
Of course, some bold ideas only lead to larger and more spectacular failures. In particular, Branson points to his foray into the soft drink market as an opportunity he wished he had passed on.
“[The] first year we were on a real roll, but then [a leading soft-drink company] sent two SWOT teams to the UK and shelf space got smaller and smaller,” he says. “Problem was, with [this company] there isn’t anything fundamentally different, unlike airlines. [The] key is to make sure you do something that is a big differentiator.”
The Right Path Forward
Drawing on his 40-plus years of business expertise, Branson offers practical advice for Canadian entrepreneurs looking to take their businesses to the next level – from always carrying a notebook to write down ideas, to becoming involved in every aspect of the business.
“Immerse yourself 100 per cent in everything; learn about the ins and outs of every single department, [and] as you grow, delegate. That way, when your team comes to you with problems, you’ll know the answers and have valuable advice to offer.” He adds, “I remember Andrew Black, CEO at Virgin Mobile in Canada, doing just that when he started the company. Andrew worked on the phones at the call centre in the early days to learn customer experiences first-hand. Today he still makes time to visit the call centre to keep in touch.”
Despite the current global economic downturn, Branson offers an optimistic outlook for small business owners who are unafraid of challenges.
“Over the last 40 years, the world has changed significantly, but the fundamentals of business have stayed the same and success is still out there for the brave,” he says. “Is it worth the effort? Absolutely. And although we are sailing right through one of the worst economic crises in decades, this current climate still brings opportunities for many businesses to capitalize on – you just need to be brave and bold.”
Monday, January 12, 2009
Pescod talks Oilexco + More
The close: 2009 in the red
Monday, January 12, 2009
Just a week ago, investors might have been contemplating how high Canada's S[amp]amp;P/TSX composite index could rise after bouncing about 24 per cent from its low in November and posting impressive gains at the start of 2009. Now, they're back to contemplating how low the index can go.
On Monday, the S[amp]amp;P/TSX composite index closed at 8793.33, down 291.85 or 3.2 per cent. For the year, it is now down 2.2 per cent – the first time in 2009 that it has closed at a loss – but is still about 15 per cent above its November low.
Commodity producers were big casualties. Energy stocks fell after the price of crude oil meandered below the $40 (U.S.) a barrel threshold, this time falling to $37.59 a barrel, down $3.24. Suncor Energy Inc. fell 4.8 per cent and Canadian Oil Sands Trust fell 5.4 per cent.
Gold also fell, to $821 an ounce, down $34, which of course hammered gold producers. Barrick Gold Corp. fell 3.1 per cent and Kinross Gold Corp. fell 3.5 per cent. To cap things off, fertilizer companies also had a bad day, with Potash Corp. of Saskatchewan Inc. falling 11.1 per cent.
But this was not just a commodities story. It didn't help that the Bank of Canada's Business Outlook Survey for the fourth quarter, released on Monday, pointed to deteriorating economic conditions: The survey of senior managers suggested a decline in sales, capital spending and hiring among Canadian companies.
This seems to have frightened investors out of just about everything, including banks, after sentiment in the United States again turned sour on financials. Bank of Nova Scotia fell 5.2 per cent and Toronto-Dominion Bank fell 2.5 per cent.
In the United States, the day's losses were less severe, though still ugly. The Dow Jones industrial average closed at 8474.05, down 125.13 points or 1.5 per cent. The broader S[amp]amp;P 500 closed at 870.26, down 20.09 points or 2.3 per cent.
Financials were whacked, with Citigroup Inc. falling 17 per cent after reports that it could sell a controlling stake in its brokerage unit to Morgan Stanley. Bank of America Corp. fell 12 per cent on a report that its dividend could be slashed dramatically.
Alcoa Inc. fell 6.9 per cent before releasing its fourth quarter results – the first in the Dow to do so – after markets closed. The aluminum producer announced a loss of nearly $1.2-billion, or $1.49 a share, far worse than analysts had expected. Sales fell 19 per cent from last year.
[amp]nbsp;
Did Speculation Fuel Oil Price Swings?
(CBS) About the only economic break most Americans have gotten in the last six months has been the drastic drop in the price of oil, which has fallen even more precipitously than it rose. In a year's time, a commodity that was theoretically priced according to supply and demand doubled from $69 a barrel to nearly $150, and then, in a period of just three months, crashed along with the stock market.
So what happened? It's a complicated question, and there are lots of theories. But as correspondent Steve Kroft reports, many people believe it was a speculative bubble, not unlike the one that caused the housing crisis, and that it had more to do with traders and speculators on Wall Street than with oil company executives or sheiks in Saudi Arabia.
To understand what happened to the price of oil, you first have to understand the way it's traded. For years it has been bought and sold on something called the commodities futures market. At the New York Mercantile Exchange, it's traded alongside cotton and coffee, copper and steel by brokers who buy and sell contracts to deliver those goods at a certain price at some date in the future.
It was created so that farmers could gauge what their unharvested crops would be worth months in advance, so that factories could lock in the best price for raw materials, and airlines could manage their fuel costs. But more than a year ago those markets started to behave erratically. And when oil doubled to more than $147 a barrel, no one was more suspicious than Dan Gilligan.
As the president of the Petroleum Marketers Association, he represents more than 8,000 retail and wholesale suppliers, everyone from home heating oil companies to gas station owners.
When 60 Minutes talked to him last summer, his members were getting blamed for gouging the public, even though their costs had also gone through the roof. He told Kroft the problem was in the commodities markets, which had been invaded by a new breed of investor.
"Approximately 60 to 70 percent of the oil contracts in the futures markets are now held by speculative entities. Not by companies that need oil, not by the airlines, not by the oil companies. But by investors that are looking to make money from their speculative positions," Gilligan explained.
Gilligan said these investors don't actually take delivery of the oil. "All they do is buy the paper, and hope that they can sell it for more than they paid for it. Before they have to take delivery."
"They're trying to make money on the market for oil?" Kroft asked.
"Absolutely," Gilligan replied. "On the volatility that exists in the market. They make it going up and down."
He says his members in the home heating oil business, like Sean Cota of Bellows Falls, Vt., were the first to notice the effects a few years ago when prices seemed to disconnect from the basic fundamentals of supply and demand. Cota says there was plenty of product at the supply terminals, but the prices kept going up and up.
"We've had three price changes during the day where we pick up products, actually don't know what we paid for it and we'll go out and we'll sell that to the retail customer guessing at what the price was," Cota remembered. "The volatility is being driven by the huge amounts of money and the huge amounts of leverage that is going in to these markets."
About the same time, hedge fund manager Michael Masters reached the same conclusion. Masters' expertise is in tracking the flow of investments into and out of financial markets and he noticed huge amounts of money leaving stocks for commodities and oil futures, most of it going into index funds, betting the price of oil was going to go up.
Asked who was buying this "paper oil," Masters told Kroft, "The California pension fund. Harvard Endowment. Lots of large institutional investors. And, by the way, other investors, hedge funds, Wall Street trading desks were following right behind them, putting money - sovereign wealth funds were putting money in the futures markets as well. So you had all these investors putting money in the futures markets. And that was driving the price up."
In a five year period, Masters said the amount of money institutional investors, hedge funds, and the big Wall Street banks had placed in the commodities markets went from $13 billion to $300 billion. Last year, 27 barrels of crude were being traded every day on the New York Mercantile Exchange for every one barrel of oil that was actually being consumed in the United States.
"We talked to the largest physical trader of crude oil. And they told us that compared to the size of the investment inflows - and remember, this is the largest physical crude oil trader in the United States - they said that we are basically a flea on an elephant, that that's how big these flows were," Masters remembered.
Yet when Congress began holding hearings last summer and asked Wall Street banker Lawrence Eagles of J.P. Morgan what role excessive speculation played in rising oil prices, the answer was little to none. "We believe that high energy prices are fundamentally a result of supply and demand," he said in his testimony.
(CBS) As it turns out, not even J.P. Morgan's chief global investment officer agreed with him. The same that day Eagles testified, an e-mail went out to clients saying "an enormous amount of speculation" ran up the price" and "140 dollars in July was ridiculous."
If anyone had any doubts, they were dispelled a few days after that hearing when the price of oil jumped $25 in a single day. That day was Sept. 22.
Michael Greenberger, a former director of trading for the U.S. Commodity Futures Trading Commission, the federal agency that oversees oil futures, says there were no supply disruptions that could have justified such a big increase.
"Did China and India suddenly have gigantic needs for new oil products in a single day? No. Everybody agrees supply-demand could not drive the price up $25, which was a record increase in the price of oil. The price of oil went from somewhere in the 60s to $147 in less than a year. And we were being told, on that run-up, 'It's supply-demand, supply-demand, supply-demand,'" Greenberger said.
A recent report out of MIT, analyzing world oil production and consumption, also concluded that the basic fundamentals of supply and demand could not have been responsible for last year's run-up in oil prices. And Michael Masters says the U.S. Department of Energy's own statistics show that if the markets had been working properly, the price of oil should have been going down, not up.
"From quarter four of '07 until the second quarter of '08 the EIA, the Energy Information Administration, said that supply went up, worldwide supply went up. And worldwide demand went down. So you have supply going up and demand going down, which generally means the price is going down," Masters told Kroft.
"And this was the period of the spike," Kroft noted.
"This was the period of the spike," Masters agreed. "So you had the largest price increase in history during a time when actual demand was going down and actual supply was going up during the same period. However, the only thing that makes sense that lifted the price was investor demand."
Masters believes the investor demand for commodities, and oil futures in particular, was created on Wall Street by hedge funds and the big Wall Street investment banks like Morgan Stanley, Goldman Sachs, Barclays, and J.P. Morgan, who made billions investing hundreds of billions of dollars of their clients’ money.
"The investment banks facilitated it," Masters said. "You know, they found folks to write papers espousing the benefits of investing in commodities. And then they promoted commodities as a, quote/unquote, 'asset class.' Like, you could invest in commodities just like you could in stocks or bonds or anything else, like they were suitable for long-term investment."
(CBS) Dan Gilligan of the Petroleum Marketers Association agreed.
"Are you saying that companies like Goldman Sachs and Morgan Stanley and Barclays have as much to do with the price of oil going up as Exxon? Or…Shell?" Kroft asked.
"Yes," Gilligan said. "I tease people sometimes that, you know, people say, 'Well, who's the largest oil company in America?' And they'll always say, 'Well, Exxon Mobil or Chevron, or BP.' But I'll say, 'No. Morgan Stanley.'"
Morgan Stanley isn't an oil company in the traditional sense of the word - it doesn't own or control oil wells or refineries, or gas stations. But according to documents filed with the Securities and Exchange Commission, Morgan Stanley is a significant player in the wholesale market through various entities controlled by the corporation.
It not only buys and sells the physical product through subsidiaries and companies that it controls, Morgan Stanley has the capacity to store and hold 20 million barrels. For example, some storage tanks in New Haven, Conn. hold Morgan Stanley heating oil bound for homes in New England, where it controls nearly 15 percent of the market.
The Wall Street bank Goldman Sachs also has huge stakes in companies that own a refinery in Coffeyville, Kan., and control 43,000 miles of pipeline and more than 150 storage terminals.
And analysts at both investment banks contributed to the oil frenzy that drove prices to record highs: Goldman's top oil analyst predicted last March that the price of a barrel was going to $200; Morgan Stanley predicted $150 a barrel.
Both companies declined 60 Minutes' requests for an interview, but maintain that their oil businesses are completely separate from their trading activities, and that neither influence the independent opinions of their analysts. There is no evidence that either company has done anything illegal.
Asked if there is price manipulation going on, Dan Gilligan told Kroft, "I can't say. And the reason I can't say it, is because nobody knows. Our federal regulators don't have access to the data. They don't know who holds what positions."
"Why don't they know?" Kroft asked.
"Because federal law doesn't give them the jurisdiction to find out," Gilligan said.
It's impossible to tell exactly who was buying and selling all those oil contracts because most of the trading is now conducted in secret, with no public scrutiny or government oversight. Over time, the big Wall Street banks were allowed to buy and sell as many oil contracts as they wanted for their clients, circumventing regulations intended to limit speculation. And in 2000, Congress effectively deregulated the futures market, granting exemptions for complicated derivative investments called oil swaps, as well as electronic trading on private exchanges.
(CBS) "Who was responsible for deregulating the oil future market?" Kroft asked Michael Greenberger.
"You'd have to say Enron," he replied. "This was something they desperately wanted, and they got."
Greenberger, who wanted more regulation while he was at the Commodity Futures Trading Commission, not less, says it all happened when Enron was the seventh largest corporation in the United States. "This was when Enron was riding high. And what Enron wanted, Enron got."
Asked why they wanted a deregulated market in oil futures, Greenberger said, "Because they wanted to establish their own little energy futures exchange through computerized trading. They knew that if they could get this trading engine established without the controls that had been placed on speculators, they would have the ability to drive the price of energy products in any way they wanted to take it."
"When Enron failed, we learned that Enron, and its conspirators who used their trading engine, were able to drive the price of electricity up, some say, by as much as 300 percent on the West Coast," he added.
"Is the same thing going on right now in the oil business?" Kroft asked.
"Every Enron trader, who knew how to do these manipulations, became the most valuable employee on Wall Street," Greenberger said.
But some of them may now be looking for work. The oil bubble began to deflate early last fall when Congress threatened new regulations and federal agencies announced they were beginning major investigations. It finally popped with the bankruptcy of Lehman Brothers and the near collapse of AIG, who were both heavily invested in the oil markets. With hedge funds and investment houses facing margin calls, the speculators headed for the exits.
"From July 15th until the end of November, roughly $70 billion came out of commodities futures from these index funds," Masters explained. "In fact, gasoline demand went down by roughly five percent over that same period of time. Yet the price of crude oil dropped more than $100 a barrel. It dropped 75 percent."
Asked how he explains that, Masters said, "By looking at investors, that's the only way you can explain it."
The regulatory lapses in the commodities market that many believe fomented the rampant speculation in oil have still not been addressed, although the incoming Obama administration has promised to do so.
Source
Questerre Updates Quebec Activities
Questerre Updates Quebec Activities
00:41 EST Monday, January 12, 2009
CALGARY, ALBERTA--(Marketwire - Jan. 12, 2009) -
NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) reported today that drilling operations have been successfully completed on the St. David well in the St. Lawrence Lowlands, Quebec.
Drilled to a target depth of 1995m on schedule and budget, St. David is the third well in the four-well farm-in program. The well has been cased as a potential gas producer. St. David was recently logged to evaluate the Utica and Lorraine shale/siltstone zones and the Trenton Black-River group. An analysis of these logs is ongoing to select prospective intervals for stimulation and testing.
Subject to equipment availability, completion and testing will commence after spring break-up. The Company expects the operator will spud the fourth and final well in the program, St. Edouard, in late February.
Questerre also reported on the status of the La Visitation and Gentilly wells in the Lowlands. Completion operations with multiple fracs on the recently drilled La Visitation well are currently underway. On the Gentilly well, the operational issues surrounding the packer have been resolved in order to allow testing of the Lorraine to resume shortly. Questerre anticipates preliminary results from these wells will be available during the second quarter.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "Drilling results on St. David were very positive as we saw promising gas shows in the Utica and Lorraine." Mr. Binnion also commented, "The pilot programs in the Lowlands are rapidly ramping up with several operations underway simultaneously. All these operations are designed to provide extensive technical data critical to assessing the commerciality of the play. We are very pleased that the operator does not compromise in this regard. We believe we remain on track to have an adequate sample of quality results to make a preliminary assessment of the commerciality of the Quebec shales in 2009."
Questerre is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.
This news release does not constitute an offer of securities for sale in the United States. These securities may not be offered or sold in the United States absent registration or an available exemption from registration under the United States Securities Act of 1933, as amended.
FOR FURTHER INFORMATION PLEASE CONTACT:
Questerre Energy Corporation
Anela Dido
Investor Relations
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
© Copyright CCNMatthews
Sunday, January 11, 2009
The Shale Gas Revolution
Friday, January 9, 2009
Cro Insiders Loading Up On Shares For A 10 Bagger In 2009
- The drill program which comprised our 253 million dollar property is open at depth and further drilling could significantly increase the resource. Some of our strongest results were on outer edges of the drill zone. De-watering of the 2500 meter mine shaft will allow them to get at these areas. The intersection I speak of is the 7% nickel over 5 meters that intersection comes from the end of the drill core. Further exploration could offer up amazing results. 0 summer 2008 drill results out, any significant finds in mine ready atikocan or kenora/dryden properties will lift stock.
- The company has contractual agreements with Opiwica explorations (OPW) on the TSX.V to mill there major gold and copper find with in close proximity of Canadian Arrows Planned site. Mining could begin on both projects in early 2010. This represents earnings and is a good partnership for a company seeking to be the next significant Nickel Copper producer in Canada.
- Canadian Arrow has the ability to produce nickel in its mine at 3.47 per pound nickel. That kind of number is unheard of in comparison to other mines. With production scheduled for early 2010 (around the same time our economy should be significantly rebounding) what if nickel prices return back to 15 dollars per pound? This site will look like a gem to any investor! (plus the property would be worth about 400mil at 15 dollars per pound nickel.
This is just a few of the key points that I believe make this company look attractive. If my predictions are correct we will see a significant rebound to normal multiples over the course of the next couple of months and with any significant news pertaining to my points and our sp and volume will be sent soaring. JV with cash on the books and abilitiy to help put project into production will send our sp back to .50 if not higher! I am Bull on Canadian Arrow mines.
Top Court Rules On Tax Scheme
So, while taxpayers will still have to be wary of offending the GAAR through the application of legitimate tax breaks, it's clearly acceptable for couples or individuals to use investment or business assets to pay for a home or to retire a mortgage, and to immediately borrow money to replace those assets and to deduct the interest cost as an expense at tax time.
The Supreme Court had already ruled in 2001 that Vancouver lawyer John Singleton was perfectly justified in taking $300,000 from the capital account of his law firm to help buy a house in his wife's name and, on the same day that he wrote the cheque for the house, borrow money to replace the partnership capital and claim a tax deduction for his interest costs.
Top court says no to family's tax scheme TheStar.com - Business - Top court says no to family's tax scheme
Judges rule 4-3 that husband's deduction of wife's expenses was `abusive tax avoidance'
January 09, 2009 James DawBusiness Columnist
Earl Lipson has lost his final appeal over his right to deduct his wife Jordanna's interest expenses and leave them with more money to pay for a $750,000 home they bought in Toronto in 1994.
But thousands of other taxpayers can breathe easier, says their lawyer, Edwin Kroft of McCarthy Tétrault LLP in Vancouver, and others familiar with yesterday's widely anticipated Supreme Court of Canada ruling, which also applies to Lipson's brother Jordan.
A four-to-three majority of judges ruled that a series of transactions and the use of available tax breaks resulted in abusive tax avoidance, contrary to the general anti-avoidance rule, or GAAR.
But Kroft says it will be significant to many taxpayers that the court's general endorsement of two lower court rulings did not give the Canada Revenue Agency everything it might have wanted.
The top judges saw nothing wrong with the taxpayers' wives deducting interest expenses for a loan used to purchase shares in a family company, and for the brothers to apply the proceeds of the loans to buy family homes.
"The tax benefit of the interest deduction resulting from the refinancing of the shares of the family corporation by Mrs. (Jordanna) Lipson is not abusive viewed in isolation, but the ensuing tax benefit of the attribution of Mrs. Lipson's interest deduction to Mr. Lipson is," wrote Justice Louis LeBel for the majority.
The brothers had made use of the option to report the sale of company shares at their adjusted cost instead of the fair market value, as is permitted.
They would thus have had to report any income their wives earned from dividends. But interest expenses on loans produced a loss that gave them the major tax benefit questioned by the CRA, and which has now been ruled inappropriate by the four Supreme Court judges.
"I don't know whether Mrs. Lipson had other sources of income (than dividends from the family company), but to the extent she did, she could claim the interest expense deduction, or she could carry forward such deductions and claim them in future years," said lawyer Brian Kearl of Gowling Lafleur Henderson LLP in Calgary.
"At the time, the carry-forward period was only seven years. Now it is 20 years."
So, while taxpayers will still have to be wary of offending the GAAR through the application of legitimate tax breaks, it's clearly acceptable for couples or individuals to use investment or business assets to pay for a home or to retire a mortgage, and to immediately borrow money to replace those assets and to deduct the interest cost as an expense at tax time.
The Supreme Court had already ruled in 2001 that Vancouver lawyer John Singleton was perfectly justified in taking $300,000 from the capital account of his law firm to help buy a house in his wife's name and, on the same day that he wrote the cheque for the house, borrow money to replace the partnership capital and claim a tax deduction for his interest costs.
"So unless the transaction is very similar to the Lipsons' – if it's a plain vanilla debt swap strategy – I think it's okay," said Jamie Golombek, managing director, tax and estate planning at CIBC Private Wealth Management.
Kroft said "his decision still leaves lots of uncertainty for taxpayers – and the Crown" over the use of complicated tax planning strategies.
With the division of opinion among judges about Canada Revenue's use of the general anti-avoidance rules, "there is no clarity that they are going to win."
Thursday, January 8, 2009
Oil's plunge continues
Oil's plunge continues
GEORGE JAHN
Thursday, January 08, 2009
VIENNA — Crude prices fell again Thursday on more evidence that the global economy is under strain and that demand for energy will fall further.
Light, sweet crude for February delivery fell $1.11 cents to $41.52 (U.S.)a barrel on the New York Mercantile Exchange.
On Wednesday, the contract tumbled 12 per cent, or $5.95, to settle at $42.63 after the U.S. Department of Energy's Energy Information Administration said that inventories of commercial crude oil inventories rose 6.7 million barrels. That was well above the 1.5 million-barrel build expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., suggesting demand continues to erode.
Later Thursday, the U.S. government will report natural gas reserves.
The “huge builds in both the crude and products markets for last week” was the main downward price driver, said trader and analyst Stephen Schork, in his Schork Report. And Toby Hassall, an analyst with investment firm Commodity Warrants Australia in Sydney, said the stock build reminded the market that demand remains weak.
The global economy continues to weaken and on Thursday, U.S. president-elect Barack Obama said the recession could “linger for years” unless Congress pumps unprecedented sums from Washington into the economy.
“I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible,” Mr. Obama said in a speech set to be delivered at George Mason University in Fairfax, Va., outside Washington. Excerpts from his prepared text were released in advance by his transition team.
It was the fourth day in a row that Mr. Obama has addressed this front-burner issue and it was the highest-profile appearance yet on an issue that can define his early months in office.
The economic crisis has hit retailers hard as consumers steer clear of buying even heavily discounted merchandise.
Department-store operator Macy's Inc. said Thursday it will close 11 stores in nine states — affecting 960 employees — and lowered its forecast for the fourth quarter after one of the weakest holiday seasons in years.
Wal-Mart, the largest retailer in the U.S., slashed its forecast for fourth-quarter earnings, and its shares fell more than eight per cent in pre-market trading.
Equities markets fell from Asia to Europe.
The FTSE 100 index of leading British shares slipped 78.94 points, or 1.8 per cent, at 4,428.57, despite another half percentage point interest rate reduction from the Bank of England, which took the benchmark rate to an all-time low of 1.5 per cent.
Meanwhile Germany's DAX fell 82.86 points, or 1.7 per cent, to 4,854.61, while France's CAC-40 was down 71.64 points, or 2.1 per cent, to 3,274.45.
Tokyo's Nikkei 225 stock average lost 362.82, or 3.9 per cent, to 8,876.42, snapping a seven-day winning streak as the yen traded higher, and Hong Kong's Hang Seng Index fell 571.55 points, or 3.8 per cent, to 14,415.91.
Oil prices had risen earlier this week to above $48 from a five-year low of $33.87 a barrel on Dec. 19 on investor concern that the conflict between Israel and Hamas in Gaza could spread to the rest of oil-rich Middle East and affect supplies.
Lebanese militants fired at least three rockets into Israel early Thursday, threatening to open a new front for the Jewish state as it pushed forward with a bloody offensive in the Gaza Strip that has killed nearly 700 people. Israel responded with mortar shells.
“There was a shift of focus to geopolitical issues last week,” Mr. Hassall said. “If the situation calms down a little over there, the market's focus will come back to the weak global demand outlook, and that should keep prices pretty suppressed.”
Also adding to tensions in markets recently was the gas dispute between Ukraine and Russia, with all gas deliveries to Europe through Ukraine frozen for a second day. Both sides met earlier Thursday and were in Brussels to speak to the EU about how to resolve the impasse.
In other Nymex trading, gasoline futures rose less than a penny to $1.08 a gallon. Heating oil gained 2.6 cents to $1.57 a gallon, while natural gas for February delivery added 9.4 cents to $5.966 per 1,000 cubic feet.
In London, February Brent crude fell 46 cents to $45.40 a barrel on the ICE Futures exchange.
© Copyright The Globe and Mail
Merckles to sell Ratiopharm as credit approved
TheStar.com - Business - Merckles to sell Ratiopharm as credit approved
January 08, 2009
FRANKFURT–The family holding company of dead German tycoon Adolf Merckle got a long-awaited bridge loan from banks yesterday, in a deal that will force it to sell Ratiopharm, the world's fourth-largest generic drugs maker.
The family's VEM Asset Management investment vehicle said its creditor banks had transferred the bridge loan after weeks of tough talks. Financial sources had earlier told Reuters the loan was for 400 million euros ($545 million U.S.).
"We are very happy to have found a solution," VEM head Ludwig Merckle, one of Adolf's four children, said in a statement.
The loan, which buys the family time to work out a broader restructuring of the business empire that Merckle built up over the past 40 years, comes less than two days after he threw himself in front of a train.
In addition to Ratiopharm, the Merckle family controls HeidelbergCement and drug wholesaler Phoenix Group as well as a diverse portfolio of other business investments that helped put Merckle in the ranks of the world's wealthiest people.
Under the deal, a trustee named by VEM and its banks will guide the sale process for Ratiopharm and Ludwig Merckle will also have to step down as VEM chief, the statement said.
Reuters News Agency
Wednesday, January 7, 2009
Oil Ready For Another Big Bull Run?
Bolling: Oil Should Be in the $70-$85 Range, Buy the Dips
Posted Jan 07, 2009 11:53am EST by Aaron Task in Investing, Commodities
Related: USO, DUG, DXO, OIH, XLE
After rallying 40% from the December lows, oil prices were recently down more than 3% to $46.95 per barrel Wednesday, falling in concert with stocks and as the DOE reported a sharp build in inventories.
Declines like these are opportunities to add to oil positions, says Eric Bolling, a former NYMEX commodity trader and host on Fox Business News. While oil's midsummer rally overshot reality, its subsequent decline was similarly overdone, says Bolling, who believes oil should be in the $70-$85 per barrel range.
The trader and television commentator is currently long oil via the United States Oil ETF, which he says is the best ETF at handling the "roll" that occurs when crude futures contracts expire each month.
Bolling said he will add to the USO position if/when spot crude falls below $45 per barrel - which it approached earlier today - and is a long-term bull on the commodity because of geopolitical risks and the U.S. government's efforts to "reflate" the economy.
And David Pescod Says...
CRUDE OIL
$42.82 -5.76
NATURAL GAS
$5.86 -0.13
It’s an ugly day on the markets. In the U.S.A. they report
almost 700,000 job losses, which shows things aren’t going
that well.
Meanwhile, in the energy market it’s also an ugly day as
the U.S. Department of Energy reported its latest petroleum
inventories for the week and crude inventories rose last
week by 6.7 million barrels and is currently much higher
than the same time last year.
Gasoline inventories rose last
week by 3.3 million barrels to 211.4 million barrels and are
slightly lower than last year. The net result was a significant
swack to the oil index and oil dropped over $5.00 a barrel.
In the meantime, it’s the time of year that oil analysts tend
to make the projections for the coming year and needless to
say, the projections from the different brokerage houses are
all over the place.
The parameters they are looking at are
much the same, but what their crystal ball delivers can be
quite different. The one big negative is that suddenly the
world has a lot bigger supply than it needs, courtesy of addi-
tional Saudi production that could come on stream. That’s
the only big negative, but it’s the only one that matters.
If you are trying to find positives, it’s that it looks like
OPEC might be actually cutting back as it said it might, par-
ticularly some of the countries that never seem to do what
they say they will do such as Venezuela, Iran, Ecuador and
the like. Also the Americans are looking up to 20 million
barrels of oil for their strategic reserves and the Chinese
also suggesting they might need multiples of that, is a posi-
tive. But quickly becoming the big factor is the enormous
cutbacks by companies around the world from Enerplus
Income Fund in Canada (cutting exploration from $500 mil-
lion to $300 million) to Gazprom (the Russian giant cutting
exploration by 25%).
With oil companies around the world, whether it’s Pemex
or Petrobras, if these people aren’t looking for oil...they are
not finding it and meanwhile, the natural decline rates in
different areas of the world can be anywhere from 5% to
30%, so a year from now, there is going to be less oil coming
on stream.
It’s the time of year that analysts get around to making
predictions about what next for oil prices for the different
brokerage houses and of the reports we find of interest is
the one put out on December 31st by Barclays Capital and
they write, “At the moment there is an inbuilt instability in-
volved in the realities of supply and demand. The price that
generates enough long term energy supply is a high one,
and the current freezing up of investment activity across
energy and alternatives is likely to make it even higher in
the medium and long term.
QEC News Unrisked Target=$41.42:Initial flow back the wells have co-produced burnable gas and frac fluids at varying rates
Questerre Updates Their Quebec Yamaska Activities
CALGARY, ALBERTA--(Marketwire - Jan. 7, 2009) -
NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) updated operations for the St. Francois du Lac and St. Louis de Richelieu horizontal wells on the Yamaska permits in the St. Lawrence Lowlands, Quebec.
Operated by its partner, both horizontal wells were successfully frac'd. Frac operations went according to plan and on schedule. On initial flow back the wells have co-produced burnable gas and frac fluids at varying rates.
The frac plugs were only just recently drilled out with minor operational delays. Tubing has been run in the hole to complete the well for long term production testing which will also assist in lifting the frac fluids for final clean up of the wells. We anticipate it will take several weeks for final clean up of the wells and determination of a final stabilized production rate equivalent to a '30-day rate'.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "These are the two first horizontal wells in the Lowlands and are another step in a multi-well pilot program to evaluate the commerciality of the Quebec shale plays. They represent a critical step in our technical understanding of the Quebec shales and we are obviously pleased with how well the frac operations were carried out. "
Tuesday, January 6, 2009
Cro Insiders Loaded Up In December
- The drill program which comprised our 253 million dollar property is open at depth and further drilling could significantly increase the resource. Some of our strongest results were on outer edges of the drill zone. De-watering of the 2500 meter mine shaft will allow them to get at these areas. The intersection I speak of is the 7% nickel over 5 meters that intersection comes from the end of the drill core. Further exploration could offer up amazing results. 0 summer 2008 drill results out, any significant finds in mine ready atikocan or kenora/dryden properties will lift stock.
- The company has contractual agreements with Opiwica explorations (OPW) on the TSX.V to mill there major gold and copper find with in close proximity of Canadian Arrows Planned site. Mining could begin on both projects in early 2010. This represents earnings and is a good partnership for a company seeking to be the next significant Nickel Copper producer in Canada.
- Canadian Arrow has the ability to produce nickel in its mine at 3.47 per pound nickel. That kind of number is unheard of in comparison to other mines. With production scheduled for early 2010 (around the same time our economy should be significantly rebounding) what if nickel prices return back to 15 dollars per pound? This site will look like a gem to any investor! (plus the property would be worth about 400mil at 15 dollars per pound nickel.
This is just a few of the key points that I believe make this company look attractive. If my predictions are correct we will see a significant rebound to normal multiples over the course of the next couple of months and with any significant news pertaining to my points and our sp and volume will be sent soaring. JV with cash on the books and abilitiy to help put project into production will send our sp back to .50 if not higher! I am Bull on Canadian Arrow mines.
Facing Losses, German Billionaire Takes Own Life
January 7, 2009
Facing Losses, German Billionaire Takes Own Life
By CARTER DOUGHERTY
FRANKFURT — Adolf Merckle, the German billionaire whose speculation in volatile Volkswagen shares pushed his sprawling business empire to the edge of ruin, has committed suicide, his family said Tuesday.
Mr. Merckle, 74, was found dead Monday night on railroad tracks near his villa in the southern German hamlet of Blaubeuren. German authorities in the nearby city of Ulm confirmed the death, saying there was no sign of foul play.
“The distress to his firms caused by the financial crisis and the related uncertainties of recent weeks, along with the helplessness of no longer being able to handle the situation, broke the passionate family businessman, and he ended his life,” the family said in a statement.
Forbes put Mr. Merckle’s fortune at $9.2 billion in 2008. A native of Dresden who made his way to the West after World War II, Mr. Merckle parlayed a family business in chemicals into one of the biggest pharmaceutical companies in the world. Ratiopharm, a maker of generic drugs that nonetheless became a recognized brand itself, became the pride of the family.
Other businesses included Phoenix, a pharmaceutical wholesaler, and HeidelbergCement, a building materials supplier that in 2007 acquired a British rival, Hanson, to become a leading global player.
The financial crisis began taking its toll on HeidelbergCement last year as the debt incurred to buy Hanson became more burdensome. Standard & Poor’s lowered the company’s credit rating as liquidity became scarce thanks to global market convulsions.
But Mr. Merckle’s dalliance with Volkswagen shares, more than any other single investment, caused the distress that apparently led to his death. Caught in the “short squeeze” that also cost many hedge funds dearly, Mr. Merckle lost hundreds of millions of dollars, and was facing the breakup and sale of his business empire.Copyright 2009 The New York Times Company
QEC: Rises Russian gas disruption spreads across Europe
Russian gas disruption spreads across Europe
CHRISTIAN LOWE
Tuesday, January 06, 2009
MOSCOW — Russia's worsening gas dispute with Ukraine cut supplies on Tuesday to Turkey and a swathe of European countries, threatening disruption as far west as Italy and Germany.
The European Union, dependent on Russia for a quarter of its gas, urged Moscow and Kiev to find a solution this week. The head of Ukraine's state energy firm said he would fly to Moscow on Thursday.
Bulgaria, Turkey, Macedonia, Greece and Croatia said flows of Russian gas via Ukraine had come to a halt, creating what Bulgaria called a “crisis situation” in the middle of winter.
European Union member states Austria and Romania said deliveries were down 90 per cent and 75 per cent, respectively, and German energy firms warned there could be gas shortages in Europe's biggest economy if the dispute dragged on and sub-zero temperatures persisted.
“Even our possibilities will reach their limits if these drastic cuts in shipments last and if temperatures continue to stay at very low levels,” E.ON Ruhrgas chief executive officer Bernhard Reutersberg said.
Russia's Gazprom can only guarantee gas supplies to Italy of 7 million cubic metres on Tuesday, or less than 20 per cent of the expected amount, an Italian source close to the matter said. The industry ministry earlier said Rome was planning to increase gas imports form alternative suppliers.
Russia and Ukraine blamed each other for the crisis, which has struck at the height of the European winter and spread alarm across the continent.
Ukraine's neighbour Slovakia will declare a state of emergency, Czech news agency CTK reported. Poland cut gas supplies to industrial clients.
The Czech Republic, which holds the EU's rotating presidency, said it was considering the “extreme option” of a three-way EU-Russia-Ukraine summit.
“However this is not on the table yet because we insist the two sides must reach an agreement,” Prime Minister Mirek Topolanek said.
The dispute threatens to worsen Russia's ties with the West, already fraught after its war with Georgia last year.
Europe's heavy dependence on Russian energy – and vulnerability to supply disruption – was highlighted when Moscow reduced volumes to Ukraine on New Year's Day after failing to reach agreement with Kiev over gas prices.
But Simon Blakey, director of European research at Cambridge Energy Research Associates, said EU countries had seen the crisis coming and could tap large storage reserves.
“If there are significant drops in supplies to the European Union, the key question is whether it goes on for a very long time. But it would have to go on for weeks or months for serious problems to arise for Western European customers,” he said.
Russia and Ukraine have clashed repeatedly on a range of other issues, particularly the ambition of Ukraine's pro-Western leaders to join NATO.
Russia's Gazprom said Ukraine shut down three Russian export pipelines early on Tuesday and said it was a hostage of Kiev's “irresponsible behaviour”.
“Russia has requested that the gas which was stolen, which is equivalent to 65 million cubic metres (mcm), should be returned,” deputy chief executive Alexander Medvedev said.
But Ukraine blamed Russia, with President Viktor Yushchenko saying Moscow would continue cutting gas supplies to Europe or stop them altogether.
Gazprom says it usually exports about 300 mcm of gas per day to Europe via Ukraine during the winter while Ukraine consumes about 100 mcm. The latest news of pipeline shutdowns suggests exports via Ukraine running at below 100 mcm, which could mean shortages in Europe in a day or so.
The dispute helped push gas prices around 10 per cent higher in London trading on Tuesday.
The disruptions come at a bad time for Europe, which is experiencing a cold snap likely to drive up gas demand.
“As of 3:30 a.m. (0130 GMT) supplies ... to Bulgaria as well as the transit to Turkey, Greece and Macedonia have been suspended,” Bulgaria's Economy Ministry said in a statement. “We are in a crisis situation.”
Bulgaria is particularly vulnerable to the disruptions because, unlike Greece and Turkey, it has no access to alternative gas supply routes.
State firm Bulgargaz told industrial users it was suspending or cutting supplies to a minimum and urged them to switch to alternative fuels such as oil. Two fertilizer companies, Neochim and Agroploychim, were forced to halt production.
The government said people would not be left in the cold, but urged households to start using other means for central heating.
A delegation from the Czech presidency of the European Union met Ukrainian officials in Kiev, while talks between Gazprom and the EU were planned for later on Tuesday in Berlin.
“The situation [with gas supplies via Ukraine to central Europe] ...is getting worse by the minute and we would like to talk about this new situation,” Czech Industry Minister Martin Riman told reporters in Kiev.
Most larger EU countries say they have large amounts of gas stockpiled after several mild winters, and have access to supplies from sources such as Norway and Algeria.
The conflict between Moscow and Kiev, now in its sixth day, escalated dramatically on Monday when Russian Prime Minister Vladimir Putin ordered Gazprom to cut deliveries of gas to Europe via Ukraine by about one sixth – the same amount Moscow accused Kiev of siphoning off.
Worries about European gas supplies, coupled with Israel's military operation in Gaza, have pushed oil up to a three-week high close to $50 (U.S.) a barrel. Russia, whose main export is oil, stands to benefit for a recovery in prices.
© Copyright The Globe and Mail
Friday, January 2, 2009
Bargain hunters come to buy
Bargain hunters come to buy
RTGAM
Investors feeling more optimistic about 2009 snapped up stocks in some of the worst performing sectors and sent the Toronto stock market sharply higher on the first day of trading in the new year.
New York markets also surged despite data showing a further slump in the U.S. manufacturing sector as investors expect significant moves to stimulate the American economy after president-elect Barrack Obama is sworn-in later this month.
"You have a big stimulus package coming from the incoming U.S. administration - the timing is uncertain but we know it's going to be enormous," said John Johnston, chief strategist, The Harbour Group, RBC Dominion Securities.
Toronto's S&P/TSX composite index was up 246.41 points to 9,234.11 with all sectors positive save gold and consumer staples stocks, gaining 923.56 points or 11 per cent this week.
The TSX ended 2008 down 35 per cent for the year - the second-worst year ever, compared with a 37 per cent decline in 1931.
New York's Dow Jones industrial average, down 34 per cent for 2008, rose 258.3 points to 9,034.69.
The TSX Venture Exchange added 49.67 points to 846.69. The Canadian dollar edged up 0.16 of a cent to 82.26 cents US.
The Nasdaq composite index, fresh from a 40 per cent plunge last year, rose 55.18 points to 1,632.21 while the S&P 500 added 28.55 points to 931.8 following a 38 per cent tumble in 2008.
The gains on the market followed news from the Institute for Supply Management that said its manufacturing gauge stood at 32.4 in December, a 28-year low and worse than November's reading of 36.3.
"As if it needed restating, this report emphasizes once again that the U.S. economy is in a recession, as any figure below about 44 for the headline index has historically matched up well with this condition," said Eric Lascelles, chief economics and rates strategist at TD Securities.
"And to the degree that the U.S. slowdown is not actually a business-led slowdown - driven rather by sour housing, financial, and consumer factors - it speaks to both the breadth and depth of the slowdown."
Helping drive the Dow higher was General Motors Corp. - it jumped 45 cents or 14 per cent to $3.65 (U.S.), after the U.S. government paid out $4-billion in emergency loans.
A number of deals in the financial sector arising from the credit crisis were finalized at year-end. Bank of America acquired Merrill Lynch & Co., Wells Fargo & Co. closed its acquisition of Wachovia Corp., and PNC Financial Services Group bought National City Corp.
The battered TSX base-metals sector, down 68 per cent last year, was up almost 16 per cent as the March copper contract ran up 4.7 per cent to $1.461 a pound after the metal plunged 54 per cent last year. Teck Cominco Ltd. rose $1 to $7.02 and FNX Mining surged 91 cents or 30 per cent to $3.95.
The energy sector was up 6.25 cent as the February crude contract in New York gained $1.74 to $46.34 a barrel. Petro-Canada rose $2.38 to $29.10 and EnCana Corp. gained $2.79 to $59.75.
Oil surged more than $5 a barrel Wednesday after Russia threatened to cut off natural gas supplies to Ukraine. Russia followed through with that threat Thursday, though both countries pledged to keep supplies flowing to the rest of Europe.
The Toronto financial sector, down 38.5 per cent in 2008, was ahead 1.4 per cent with Royal Bank up 85 cents to $36.95 (Canadian) while Bank of Montreal headed 90 cents higher to $32.15.
The consumer staples sector was down 0.7 per cent as Shoppers Drug Mart gave back $1.55 to $46.50.
The gold sector was weak, down two per cent as the February bullion contract in New York faded $4.80 to $879.50 (U.S.) an ounce.
NovaGold Resources Inc. shares ran up 13 cents to $1.90 (Canadian) after Electrum Strategic Resources LLC of New York bought a 30 per cent stake in the Vancouver-based company for $60-million.
High River Gold Mines Ltd. shares retreated three cents or 19.7 per cent to 34.5 cents is looking to float more equity or debt while reporting a cash shortfall amid ongoing production troubles in Africa and Russia.
- The Canadian Press
Copyright 2001 The Globe and Mail
Thursday, January 1, 2009
"If Santa Claus should fail to call, bears may come to Broad & Wall."
Analysts see equities under pressure until the U.S. musters an economic recovery – perhaps in the back half of 2009
January 01, 2009
RITA TRICHUR
BUSINESS REPORTER
"If Santa Claus should fail to call, bears may come to Broad & Wall."
That adage – coined by Yale Hirsch, founder of the Stock Trader's Almanac – warns that if the traditional Santa Claus rally fails to materialize during the last five trading days of the outgoing year and the first two of the new one, it is a bad omen for stocks.
The last five trading sessions of 2008 produced a flurry of mixed results for key New York indexes, while the Toronto stock market mostly posted gains. It remains to be seen how investors will ring in the new year when trading resumes tomorrow. Nonetheless, analysts suggest that glad tidings may be in short supply in 2009 – at least for the near term.
Since mid year, stocks on both sides of the border have been trapped in a vicious bear market that has already proven to be one of the worst ever for Toronto's main stock index.
Despite soaring to a record-breaking high of 15,073.13 on June 18, Toronto's S&P/TSX composite index posted a 35 per cent loss for 2008 as the crisis of confidence that infected credit markets also proved contagious for stocks.
If past experience is any guide, the average TSX bear market requires about three years to return to its previous peak.
The bad news, experts say, is that markets will likely remain choppy in the short term.
"We anticipate that Canadian equities will remain under pressure through 2009; our end-2009 TSX composite target is 8,000, and we expect the market to trade somewhat lower than that through the year," said David Wolf, an economist with Merrill Lynch, in a recent report.
"Our TSX operating EPS forecast for 2009 is $620, down 35 per cent from 2008 and 28 per cent below the bottom-up consensus. We cannot call a bottom for equities until Canadian market participants evince a more realistic and balanced assessment of the drastically changed macro environment and until greater visibility allows risk premiums to ebb."
Underpinning his "still-bearish outlook" is a two-pronged argument that contends analysts' revised earnings forecasts are still too upbeat, while stocks are "not nearly as cheap" as they might seem.
"Based on the bottom-up consensus EPS (earnings per share) number for 2009, the TSX is currently trading at 10 times forward earnings, indeed close to the lowest levels we've seen in 20 years," observed Wolf. "But using our $620 forecast, the market is trading at more than 13 times forward earnings, no cheaper by this metric than has generally been the case over the past several years."
Wolf may be known for his bearish views, but even traditional equities bulls are advising investors to tread cautiously. Among them is Paul Taylor, chief investment officer for BMO Harris Private Banking, who warns the first half of 2009 will be "very challenging" for capital markets.
"As a result we plan to only be a very selective buyer of Canadian equities early in the year," stated Taylor. "However, as economic growth re-ignites, there will be an opportunity for a rotation into more cyclical stocks and sectors."
Even allowing for that smidge of optimism, Taylor's cautious stance is a marked shift from last April when he predicted the outlook for equities would improve during the second half of 2008.
Taylor, however, is not the only Bay Street veteran altering forecasts in the face of deepening economic woes. Jeff Rubin, chief economist of CIBC World Markets, recently pared his 2009 year-end TSX target by 1,000 points to 11,000. In doing so, he counselled clients to "think twice before bulking up on stocks just yet."
Last June, Rubin predicted that strong crude oil prices would spur the TSX to hit a record high of 15,200 by the end of 2008. It didn't quite make it, but came within spitting distance as commodity prices soared.
As oil prices reversed course, however, he slashed his short-term target to 9,500 and then again to 9,000 on Dec. 10. The TSX actually ended 2008 at 8,987.70 points.
"We continue to expect the North American economy to contract over the first half of the year, with near-term punitive consequences for earnings," Rubin said, suggesting that investors "going long stocks now should be prepared for more jolts along the way."
Despite the darkening economic outlook, Rubin does hold out hope that "more than reasonable" returns could be generated over the next 12 months. His prediction largely hinges on plans for a mammoth fiscal stimulus from the American government. Such measures, he said, "should resuscitate growth by the second half of the year, spelling a recovery in both earnings and commodity prices, particularly energy."
Vincent Delisle, director of portfolio strategy at Scotia Capital, also suggests the long-term equity outlook is poised to improve even if the not-so-distant future looks dim.
"Since Canada's economy and equity market lag the U.S. by approximately 12 to 18 months, 2009 will be the year where Canada's numbers visibly deteriorate," Delisle said. "Our 2009 TSX EPS forecast is set at $650, pointing to a 32 per cent decline in TSX earnings."
Delisle suggests that S&P 500 earnings will likely rebound before those of the TSX. With that being his "index of choice," his "defensive" sector preferences include financials, discretionary, consumer staples and utilities.
He agrees it may be too soon to call a definitive bottom, but observes that past bear markets have either rebounded or fell into a trough during recessions rather than times of economic recovery. Historical data suggest S&P 500 bear markets typically end about eight months before the job market heals.
CIBC economists Peter Buchanan and Meny Grauman, meanwhile, suggest the TSX's bottom could be nigh if the United States manages to muster an economic recovery during the back half of 2009.
"The good news is that since the 1920s Canadian stocks have tended to bottom between three and nine months before the end of a U.S. recession, with the median being around five months," they wrote.
"True, the economic challenges facing the country are nearly unprecedented, but so too is the accompanying government response."
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