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Penn West Petroleum Ltd. Message Board

  • topsecretclearance topsecretclearance Dec 26, 2006 12:19 PM Flag

    Oil, gas getting crushed. PWE up ?

    Did they hedge enough so they make more when energy prices tumble ?

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    • al_la_ca Dec 27, 2006 2:37 AM Flag

      They have a natural gas hedge of 35% of their production at $7.00.

      • 1 Reply to al_la_ca
      • al_la_ca Dec 27, 2006 2:40 AM Flag

        Penn West recently entered into additional AECO natural gas collars on 80,000 gigajoules ("GJ") per day (equivalent to approximately 73 mmcf per day) for the 10-month period from January 1 to October 31, 2007. These collars were transacted with an average floor price of CDN$7.00 per GJ (approximately CDN$7.63 per mcf) and an average ceiling price of CDN$8.89 per GJ (approximately CDN$9.69 per mcf). The volume hedged by these contracts represents approximately 25 percent of Penn West's expected natural gas production, after royalties, for the contracted period. Total production hedged for the 2007 calendar year, after royalties, is now approximately 34%.

    • Its only up a 1/2% , so dont alert the media ,just yet.
      It shows you the outlook for oil, longer term.
      Plus it got cheap after the all Halloween eve surprise hooplah.
      The couple clarifications to the new law have been favorable/neutral.
      The tax loss selling is drying up and these stocks are now as much or more volatile,% wise as before.
      The sanctions news was the classic buy on the rumor ,sell on the news and oil in general was set for profit taking.
      Maybe the hedge fund guys wanted a new jet?

      All the best

      • 1 Reply to dividendaddict
      • Top Picks 2007: Lehmann still "trusts" Penn West Energy Trust
        Posted Dec 24th 2006 2:30PM by Steven Halpern
        Filed under: Newsletters, Top Picks 2007

        Each year Steven Halpern, editor of, surveys the
        leading financial newsletter advisors asking for their favorite stocks
        for the coming year. This article is part of his 24th annual Top Picks

        Penn West Energy Trust (NYSE: PWE) is a top conservative idea for 2007
        from income expert Richard Lehmann, editor of The Forbes/Lehmann
        Income Securities Investor. He explains, "I am a steadfast believer in
        the Canadian oil and gas trusts, despite the Canadian government's
        decision, on October 31, 2006, to begin taxing the trusts as regular
        corporations after 2010.

        "Currently, the trusts pay out income to investors as dividends and
        are not taxed on the corporate level. In addition, these dividends are
        treated as qualified dividend income for U.S. investors and subject to
        the preferential 15% tax rate.

        "Recent proposed changes in the Canadian tax law slammed all trusts
        and brought PWE down from $37 to a current price of $31. This brings
        the yield up to almost 12%. I like Penn West because it is one of the
        largest trusts, with over nine years of proven reserves and extensive
        holdings of unproven ones.

        "They have four years to restructure their finances to offset the
        increase in taxes -- something that may not even come about if past
        lobbying efforts are any indication.

        "Given that the current dividend represents only 63% of cash flow, the
        monthly dividend is safe from cuts down to a $50 a barrel price for
        oil. Investors are likely to sell shares of Penn West to lock-in tax
        losses in December, but I see price appreciation early in 2007 as
        investors buy in for the irresistible yield."

    • I noticed PGH is up as well. There must be some speculation the radical tax changes may not fly...? This is only a wild guess on my part.

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