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Westport Innovations Inc. Message Board

  • westporter2010 westporter2010 Feb 24, 2012 12:10 PM Flag

    Oil versus nat gas

    If there is anyone left out there that is actually interested in fundamentals; it is the differential in price of gas/diesel versus nat gas that will ultimately make or break this industry.

    We're at nearly 43X oil to nat gas! Historically this is absolutely off the charts!
    Keep in mind the actual energy equivalence is 6X and previously oil versus nat gas always maintained an 8-12X spread. 43X is off the hook!!

    With Iran on the boil and the end of the winter nat gas heating season just around the corner, this spread could very soon blow out over 50X. The best part is that it doesn't look like in the short term there is much that can be done about either the high oil price or the low nat gas price. For FSYS and WPRT this is the perfect storm!

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    • rmumf@rogers.com rmumf Mar 2, 2012 8:10 AM Flag

      China's shale gas revolution creates fertile ground for Westport/Weccai

      http://www.telegraph.co.uk/finance/china-business/9117072/China-claims-worlds-biggest-shale-gas-reserves.html

    • Link????

    • rmumf@rogers.com rmumf Mar 1, 2012 3:58 PM Flag

      Today the spread widened further to 44.3X. Using an energy equivalent ratio of 6 to 1 that makes oil over 7 times as expensive as natural gas.

      I've seen some posts on gas to liquids (Fischer Tropf) with Sasol potentially coming into Alberta. Does anyone have any idea on the economics of forming the LNG versus syncrude? My question is trying to determine if gas to liquids technology is a threat.

      Thanks

      John (a.k.a. clueless)

    • Thanks for positive post, Westporter. It is refreshing to get away from the negative EPS and “Ponzi scheme” chatter once in a while, and you’ve brought out the fundamentals of the bigger energy picture. As a WPRT investor, I’m somewhat biased of course, but I have more reasons to believe than not that the real numbers—the ones that count—highlight where the future lies, not on the negative earnings per share as reflected today.

      I might add that, as chart readers can plainly see, WPRT (and CLNE as well) shows a high volatility rating (1.88 beta). This accounts for why the historic chart pattern shows much wider swings, relative to the Dow, than a very low volatility stock, such as MCD (.43 beta).

      And these swings can be scary to those who are unaware. For example, last year when the Dow dropped about 11%, WPRT dropped around 23%. Typically, it can take WPRT around a month to fully recover from some of these dips—but each time it rebounds it has surged back to even higher levels. And, relative to the Dow, these gains rise above Dow averages somewhat exponentially. [Pull up a Yahoo interactive chart, plug in DJI and WPRT for a side-by-side comparison, to see what I mean.]

      So when/if WPRT takes its next big nosedive, I will try not to panic, and read things into the drop that are not necessarily true. Granted, it can be unnerving to wait up to a month (sometimes more) for a stock to return your original investment (and more).

      Playing Westport Innovations is not for everyone—certainly not for the faint of heart. And even the more aggressive investor should have the bulk of his portfolio in more historically proven growth stocks, such as MCD. This just goes without saying.

    • yeah, and he's also responsible for the mild winter and warm weather and producing February tornados!! Who knows, he might make your town disappear in a mud slide....
      you probably think the keystone pipeline would have been an instant fix for high gas prices too…… numbskulls

    • AKA Buckwheat

    • bobkochnowicz@ymail.com bobkochnowicz Feb 29, 2012 1:42 PM Flag

      Well sure they want less regulation.Look what happened in the Gulf for an example.Lets just say oops and keep drilling like nothing happened.Just remember the law of supply and demand.If oil would drop to 70 dollars a barrel do you think oil companies are going to invest in new wells?Chk cut back production by 50% when nat gas prices tumbled.Do you believe Mitt Romney saying he will get gas down to 2.50 a gallon?Only way it does would mean were in a recession.

    • 1. 1.4 million new jobs.
      2. Boost tax rolls by $800 billion dollars.
      3. Increase domestic energy production by 50%.

      "To hit those numbers, the industry would need to drill off the East and West Coasts, in waters off Florida's Gulf Coast, in Alaska's Arctic National Wildlife Refuge, and on most federal public land that's not a national park. These areas are currently off limits to drilling, except for some public land in these regions.

      In addition, the industry says it would need approval to build new pipelines to facilitate a doubling of production from Canada's vast oil sands, a halt to the gradual tightening of rules governing shale gas development, and the preservation of favorable tax policies the industry currently enjoys."

      "To Create Jobs, Let Us Drill More"
      http://money.cnn.com/2011/09/07/news/economy/oil_jobs/index.htm?source=yahoo_quote

    • <<Well Daniels didnt elaborate because its not true. >>

      Governor Daniels didn't elaborate because the moderator didn't ask him to elaborate. Daniels is a former OMB director and knows his numbers like no other. He runs the most cost effective state government in the nation imo.

      Oil and gas production is up, but no thanks to Obama. It is up because of oil and gas activity on state lands and private lands, and due to lease and permits that were granted in previous administrations. The Obama has been slow walking leasing and permitting activity on Federal land and water.

      The American Petroleum Institute (API) sent a letter to Obama last September concerning what they could contribute to the economy if the Federal government were to loosen its restrictions on domestic oil and gas production:

      http://money.cnn.com/2011/09/07/news/eco...

      1. 1.4 million new jobs.
      2. Boost tax rolls by $800 billion dollars.
      3. Increase domestic energy production by 50%.

      http://money.cnn.com/2011/09/07/news/economy/oil_jobs/index.htm?source=yahoo_quote

    • bobkochnowicz@ymail.com bobkochnowicz Feb 29, 2012 12:54 PM Flag

      Well Daniels didnt elaborate because its not true.I believe the point Chu was making was the price of gas in Europe is about 70% higher than it is here.If we had Europe gas prices people would take green energy more seriously.Google oil production/US and get the real story.

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