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Canadian Pacific Railway Limited Message Board

  • margin321 margin321 Jul 11, 2000 6:32 PM Flag

    canadian oil firms (including PCP)

     

    ..are making so much money it is embarrassing and
    they can't even spend it all.

    From recent
    story on canadian energy firms::
    ``It's getting to
    the point where it's embarrassing for companies
    because they are making so much money,'' said industry
    analyst Peter Linder with brokerage Harris Partners in
    Calgary.

    Traditionally, firms spend so-called free cash flow -- the
    amount of money generated above projected spending plans
    -- on increased exploration projects or debt
    repayment.

    In these days of sustained record high oil and
    natural gas prices and dwindling basins, however, debt
    levels are down and there is a shrinking number of
    exploration projects that can be quickly taken off the shelf
    and pursued.

    ``There are not unlimited
    projects, companies have to pace themselves so they show an
    orderly increase,'' said Linder. `` I think that six
    months from now, actual spending will be about 25
    percent higher than current forecasts and most of it will
    be on acquisitions.''

    Companies are reluctant
    to broadcast takeover spending targets because of
    the competitive nature of the activity, executives
    said.

    ``There are certainly not an unlimited number of projects
    out there and it's hard to nail down acquisitions
    spending because that's something out of the ordinary,''
    said J.C. Anderson of Anderson Exploration, which has
    boosted this year's spending target to C$685 million from
    a previous forecast of C$565 million.

    ``We
    might even do something extraordinary, like giving
    money back to our shareholders, he
    said.''


    Read the whole piece (under news on PCP.TO board.

    This topic is deleted.
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    • This J.C. Anderson quote sums up the typical
      attitude of an oil company CEO: "We might even do
      something extraordinary, like give money back to our
      shareholders." The only comparable is the democrats arguing
      against a tax cut because its a "huge giveback to the
      rich".

 
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