$21.70? and the low target something like $15? Seems a bit ambitious but nice if it happens. Even if pwe stays flat and maintains the dividend it will out do most stocks. If pwe makes another distribution cut it is not the end of the world. people are getting paid well to wait on the return of higher oil prices. Non conventional oil and deep water oil is not going to get produced at todays price and along with opec cuts will trim inventory numbers. Issues like in Nigeria are not going away and there is a baseline demand for oil and gas even in bad economic times. weak oil price? this too shall pass.
Positives on pwe: 1. large size, economy of scale. 2. high quality light oil 3. large land base 4. in a stable country vs Nigeria, Lybia, Venezuela, opec (opec quotas) 5. large tax credit pool 6. nice hedge Negatives I think high p.o.r. 2. risk of continued low price of oil Having said all that one has to believe todays price of oil is temporary even in the short term, ie: much higher withing 6 months. Long term higher price of oil is a no brainer. One gets paid to wait for oil to rebound. All said and done if pwe returns on unit price plus dividend 15% in 2009 it will beat most of the market. jmho.
I like erf, pwe, and aet. pwe apparently has good tax credit to carry it over the 2011 tax changes. Its price to book is also looking good and if oil goes back to above $45-50 it probably wont cut the dividend again in 2009. If the price to book value is below 1 that is a good indicator pwe transition back to a regular oil company should be smooth. All depends on what one thinks price of oil will do.