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Enerplus Corporation Message Board

  • lakesideinvestor lakesideinvestor Aug 24, 2009 12:44 PM Flag

    For those concerned about ERF, like I am..

    ...last night on MarktWatch, there was a link to "Sinopec, China's largest refiner quadrupled their profits" in most recent half.

    Bloomberg oil reports new 10-month high in price of oil.

    Would we be seeing the Sinopec headline in a global recession or depression? Possibly, depending on how China was doing compared to the rest of the world, but it would be a stretch.

    About two months ago, folks starting talking about China coming out of recession. Last week we see China reports GDP at 8.5% and no sign of inflation.

    Some concern over China tightening its credit/loan policies but that was put to rest by the government over the weekend.

    Now we see Sinopec quadrupling their profits and oil hitting new 10-month high.

    By the way, I don't go to CNN for oil prices any more -- they are too slow -- used to be easy since I was already on their it's to, then commodities or market...I forget, but it's fast, and it tells you the time the price was posted.

    And natural gas is up a bit, a very little bit, but it's the right direction.

    The market is waffling and it's possible it will be down for the day (profit taking) but after the run up last week, with the market showing strength today, it would be hard for me to bet against the market right now.

    But Sinopec quadrupling profits is very striking. It was noted that Sinopec's results were skewed by a very poor half last year that they compared current results to, but it still speaks volumes about global economy.

    I just can't imagine these headlines in a worsening economy but I suppose some can.

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    • "By the way, talking about losses by ERF, I have to chuckle. If one wants to talk about losses by companies, there are many other companies one could mention."

      two things... first your comment should tell you about the state of the market and second, those 'other' companies you are referring to aren't getting bid up solely on high dividend yields. obviously, there is an issue with bidding up the shares of a trust that is losing money at its current distribution level.

      there seems to be too much money pouring in from the sidelines and too few places for it to go. i'm not sure why the fear is gone. obviously if consumer sentiment continues to decline, most americans are feeling lousy about their finances. why is it that the markets are feeling so gleeful?

    • 1. I won't argue; that's why I say that, all things being equal, I will be out of ERF sometime in the next 12 months.

      2. However, there are some glimmers that we could see interesting things happen to price of natural gas. First, drillers/operators are starting to cut back on drilling here in the states;and second, if Washington passes regulations on fracturing, that's a game changer. SLB says that federal regulations on fracturing will come eventually, and with that, the domestic natural gas industry probably shuts down. If doesn't shut, it will slow down appreciably.

      So, we'll see. But another good day on Wall Street.

      By the way, talking about losses by ERF, I have to chuckle. If one wants to talk about losses by companies, there are many other companies one could mention.

    • "Folks are looking for "safe" companies with good dividends."

      isn't that the falacy here? erf has 'lost' money (ie more money out the door than in) two quarters in a row even though they've tanked capex. they readily admit that the dividend is going to go down or will be gone after the transition (a year or less from now) and they have bought more natural gas assets that require a 25% rise in current spot prices just to be break even.

      erf has been a steady ship for years, but the game is changing and investors seem to be glossing over the facts here.

    • I've been traveling for the past few days; no access to computer.

      1. Someone asked about the natural gas / oil split for ERF. I don't know if 60% natural gas answer is correct; probably is. It would be nice to have link.

      2. Oil drops two days in a row and ERF goes up both days. Folks are looking for "safe" companies with good dividends.

      3. There is a natural oil glut on the market; caught us all by surprise (ask COP, Warren Buffett, and T. Boone Pickens). I have posted that same concern with regard to oil, saying that improved technology could bring glut of oil as happened in natural gas. However, Saudi Arabia oil is so cheap to get out of ground, that there is much more to price of oil than what we're seeing with natural gas.

      We all have our myths and nothing anyone says will change our myths. For example, I don't feel global warming is "real," and no one will change my thoughts on that.

      Likewise, I am not concerned about oil glut and nothing will change my mind on that. I just look at how much China is buying up oil reserves around the world and that's all I need to know.

      Good luck to all.

      But it was nice to see ERF go up both days even though a) there's a glut of natural gas; and b) the price of oil has fallen past two days.

    • Lakeside,

      I agree with you assessment of increasing energy prices. I do think however that governments around the globe (US and China included) have bought us this recent mini recovery. When the effects of the recent stimilus packages wear off (near future) we could see a temporary but significant drop in energy prices. The governments can't spend us into prosperity. I certainly agree that we will see 70 to 90 dollar / barrel oil in the next 3 years. I may be in late in 2012 however with a substantial drop in the interim.

    • More on same, but this story is a couple days old on MarketWatch:

      WASHINGTON (MarketWatch) -- Consistent with the idea that the economy is leveling out and perhaps growing slowly, much of the economic data to be released in the coming week should show small improvements, economists said.

      The data on the weekly calendar cover the gamut of the economy, from manufacturing to housing to the consumer. The most positive news is likely to come from the factory sector, which seems to be gaining some momentum as the inventory cycle turns favorable. The news on housing is also expected to be better than the month before.

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