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Denbury Resources Inc. Message Board

  • pddane_01929 pddane_01929 Jun 24, 2008 7:39 AM Flag

    Evaporated property

    All,

    Several interesting bits of reporting in the Times this AM:

    http://www.nytimes.com/2008/06/24/business/worldbusiness/24visa.html?_r=1&ref=business&oref=slogin

    We've seen a lot of this sort of behavior worldwide recently and it points out that one of the greatest fears that we should have about world growth is political instability in all of its various manifestations.

    And, Tom Wolfe is back:

    http://dealbook.blogs.nytimes.com/2008/06/24/a-bonfire-returns-as-heartburn/?scp=1&sq=tom%20wolfe&st=cse

    For the those of you who haven't read "Bonfire of the Vanities" I highly recommend it. Wolfe has been as keen an observer of the US over 40 years as Dickens was of England in the waning years of the Empire. If one thinks about it for a minute, the fact that the market hates high oil and that oil (and all other commodities) seem to thrive in a lousy stock environment is logical. Commodities are real and we need them. Companies are combinations of business plans, some hard assets, more soft assets including human capital and good will any one of which can, in fact, evaporate over time.

    Will hard assets take it on the chin? To my mind, they will only if there is a real supply or demand issue that threatens the equation.

    Regards,

    Peter

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    • I definitely view the rise of prices of things made from hydrocarbons as a good thing not a bad thing. Our way of life has been based on waste of precious resources for more than a quarter century longer than it should have. If we simply decide to adapt to a climate of higher energy costs we can become world leaders in the idea of fixing the problem. Higher energy costs play into the US hand in one very significant way: they require better engineering. The US is the home of higher order engineering. >pddane

      I suspect there is a great deal on which we would not agree, but there's common ground here. There's real pain attached to this run up, in food prices, heating-cooling bills, and transportation costs, and for the greater good I would hope for a pause/slowing of the rise, but so far this is nothing we can't adapt to.

      We could probably cut our gasoline use by 10% with very little inconvenience or effort.
      Simply reducing the speed limits to 65 on Interstate highways, 60 on all other 4 lanes highways, and 55 on 2 lane highways would accomplish a good deal of that reduction.
      This will spur research and development of more efficient appliances, furnaces, houses, long term urban planning, vehicles, transportation systems and host of other applications.

      I think you made an excellent point in an earlier post that prices dropping significantly would be "giving up gains." If the gas price drops 50 cents a gallon look for the reduction in miles driven per vehicle to reverse. Perhaps we're now in the "sweet spot" where prices are just high enough to inspire serious conservation, technological innovation, and behavior alteration, but not so high they'll cause serious economic hardship.

    • PD, you seem to have been everywhere.

    • AV,

      I lived in Philadelphia from 1973 to 1976. I trouble-shot a problem company there, met my wife, who is from Lansdale, and had much fun running distance races as a proud member of the Plaisted Harriers (Plaisted being the first and only public boat house on boat house row (it wasn't actually a boat house)).

      I definitely view the rise of prices of things made from hydrocarbons as a good thing not a bad thing. Our way of life has been based on waste of precious resources for more than a quarter century longer than it should have. If we simply decide to adapt to a climate of higher energy costs we can become world leaders in the idea of fixing the problem. Higher energy costs play into the US hand in one very significant way: they require better engineering. The US is the home of higher order engineering.

      Regards,

      Peter

    • >Demand coninues to worsen< pd

      not to be sarcastic, etc.
      Dow increases product prices by 20% on 6/1, 25% on 7/1, total approx. 41%, +$500 fuel surcharge for truck delivery and $600 surcharge for rail delivery.
      regretfully i sucked at high level math, so i combine the increases in sales price and i get total sales and profit increase or decrease by (please fill in for me %)?
      with above info how much more oil and gas are they, probably the largest user of these resources behind the government and the oil and gas companies themselves in products they make, going to use?
      and their competitors?
      for the past year or so i've watched the wires as week after week alb has announced price increases and just keep shaking my head as stock price keeps increasing after each announcement.
      please help me understand where as country and world do we go from here?

    • <<I agree with much of what you said in an earlier post about high energy costs sorting out the issues of how we live. You seem to like the relatively wide open spaces (or at least the less populated parts of the US). My suspicion is that you'll get to enjoy that increasingly over time because I believe that with high energy costs you'll actually see many of the least populated places now depopulating further as folks try to move closer to jobs unless they're in the agricultural economy in which case they should be fine where they are.>>pddane

      I think you're right on target. That will probably be most true in the outer ring of "bedroom communities" that surround urban areas. Flyover-farm country? That already depopulated in the 60's and 70's due to great leaps forward in ag machinery-most significant the modern hydraulics introduced with the 4010 John Deere tractor and the 4 wheel drive tractors pioneered by the Stieger brothers. Where I grew up in the 50's there were 2 to 4 farms per section. Now there's a farm every two to four sections. Smaller farm population, less small town businesses to serve them. That movement is at an end. machinery can't get much bigger because bigger equipment can't be transported. Out where I live in SD I think things will be stable.
      In NC MN high gas prices have already substantially lowered the fishing pressure on N. MN lakes, but NE MN is also the Iron Range and mining is booming.

      When I go back to Sweden in 2009, I'm going to look closely to see if some impressions I formed last time are correct. Sweden seems a fair comparison because the population density and climate are so similar to MN. One impression I got last trip was surprise at how often we'd drive by a fairly large factory or assembly plant far away from the urban areas, but close to a small town. It also seemed to me that away from urban areas, there were fewer small towns, but that they were larger than in the US, at least in the upper Midwest. Makes me wonder if perhaps some businesses might move out of urban areas, to the outer ring of suburbs and even beyond. Perhaps it will be the jobs moving to the people as well as the people moving closer to the jobs?

      <<Hare's comments about LNG terminals are interesting but don't go far enough depending on how the international competitive situation plays out over the course of time. A reasonably good read is Cheniere's Investor Presentation:

      http://www.cheniere.com/presentations/Co...

      They continue to believe that their business model will work in the end. 12 Bcf of regassified capacity is a big number in relation to what we're importing now. Obviously, Cheniere is counting on the very large increases in international liquefaction capacity to bail them out. I wonder if it will. We've talked about this many times before here but, to my mind, the LNG problem here beautifully illustrates how short the world is of energy and how quickly any new energy source gets soaked up by the rapidly growing economies.>>

      I was looking at LNG a few years ago when it was around $10, kicked myself when it took off into the 40's, and now it can be bought for under $5. If LNG imports to the US take off, they'll be in a real sweet spot, but like you, I wonder if they will.
      I think I'll stick to mostly trying to find reasonably priced e&ps like DNR who are increasing both production and reserves.

      Which brings me to a question: Have you ever looked into CFW? Looks like it has a degree of similarity with DNR except for the CO2 aspect, and that through no fault of their own they also stumbled on a significant natural gas deposit.

    • Peter, looked at the Williams numbers again in relation to Cheniere's. WMB sees roughly 38 bcfd of global LNG demand which is comparable to LNG's liquefaction projection, and NA is only taking 6 bcfd per WMB forecast. WMB also projects that LNG prices in Europe will be in the $14 range, $19 in Asia and because of production gains in US, our price will be in the $10 plus range. Hare

    • Big River,

      I agree with much of what you said in an earlier post about high energy costs sorting out the issues of how we live. You seem to like the relatively wide open spaces (or at least the less populated parts of the US). My suspicion is that you'll get to enjoy that increasingly over time because I believe that with high energy costs you'll actually see many of the least populated places now depopulating further as folks try to move closer to jobs unless they're in the agricultural economy in which case they should be fine where they are.

      Hare's comments about LNG terminals are interesting but don't go far enough depending on how the international competitive situation plays out over the course of time. A reasonably good read is Cheniere's Investor Presentation:

      http://www.cheniere.com/presentations/Corporate_Presentation_April_2008.pdf

      They continue to believe that their business model will work in the end. 12 Bcf of regassified capacity is a big number in relation to what we're importing now. Obviously, Cheniere is counting on the very large increases in international liquefaction capacity to bail them out. I wonder if it will. We've talked about this many times before here but, to my mind, the LNG problem here beautifully illustrates how short the world is of energy and how quickly any new energy source gets soaked up by the rapidly growing economies.

      The oil numbers today were significantly bearish. CR +.8, MG -.1 D +2.8. 10.3 mmbbls/day of CR imports and 1.2 of MG. Demand coninues to worsen. MG is said to be down 2.1 while D is said to be down 1.1%.

      Regards,

      Peter

    • The last time I heard such crap was in KKK broadcast. >williahkw

      Given that you recently subjected us to a lecture on how enlightened and benevolent Hezbollah and the Syrians in Lebanon were, no doubnt you're a regular listener.

      I'm half of an interracial marriage. Making that comment in person, not that a self-anointed and even more self-impressed ass like you who resorts to such ad hominem retorts on message boards would have the stones to do that, would leave you a brand new attitude on life.

    • <<Since WWII, in the Cold War and now in this one, the American taxpayer and American soldiers have paid the bill and dollars and blood for the freeloading Western Euros, their 6 week vacations and welfare states, as they roll down their road to demographic extinction.
      Had the Germans and French backed us in Iraq, the way we backed the Euros in Bosnia and Kosovo, chances are Saddam would have capitulated and there would be no war and occupation there. In Afghanistan where they are supposedly allies, other than the Brits and Dutch, they (The Euros, not the Canadians and Aussies) are mostly next to useless.
      Next time the Euros, who are so impotent their combined "might" can't handle a little nation the size of Iowa with 10 million people, fear a refugee crisis and call in the US to do all their heavy lifting, I hope we remember their fickleness.

      On cost, from what I've read the cost of 9/11 in actual dollars spent and its effects on the economy dwarf even the mammoth amount that has been spent on Iraq. The US military estimates that there are over 30,000 foreign fighters who came to Iraq to attack them who are now playing with their 72 virgins each and feasting with Allah in the garden of paradise.
      Somehow I doubt those nutjobs would be sitting around camel dung fires in the Arabian and African deserts, holding hands and singing "Kumbaya" were Saddam still in place. The cost of what at the very least some of them may have done will be forever an unknown, but to pretend there would have been no cost is fantasy.>>

      The last time I heard such crap was in KKK broadcast.

    • >Urban mass transit systems are one. Providing the same degree of subsidy to rail as is applied to highways would be another. <

      besides myself, you must be the only other person i've read that believes this.
      i can't understand all these people every morning and afternoon sitting, even with gas prices as they are now, on "express"ways while the commuter trains, finally starting to see some ridership, whiz right by them.
      i know, they like the convenience of leaving and coming when they want to.
      it looks like the me-me attitude is starting to change into the we-we.
      i'm in Phila, where are you? >AV

      I split my time between central SD and N. MN, both places where other than busses, mass transit will never be an option. On subsidizing rail to the degree highways are subsidized, I was thinking more of the transportation of goods.

      Maybe cars on cross country trips as well. Just doing the rough math on the snowbirds who go South every Fall and return every winter, to go from the Twin Cities to AZ one way, would cost roughly $300 in gas, another $300 in meals and lodging, and call it another $100 (conservative) in misc. vehicle costs of driving 1600 miles.
      If a couple could drive their car to be loaded on a train, get a sleeper compartment, meals and make the trip in the same or less time,for the same amount of money wouldn't/shouldn't they do it?

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DNR
16.76-0.46(-2.67%)Sep 2 4:00 PMEDT

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