I think it is only a small part of their portfolio. They don't sound overly excited about, but once you are in there, well you have to keep on going. May as well get from it what they can.
Sushi - why weren't you at the meeting? If you are so perturbed by their performance, go along and quiz them. It was your big chance to voice your views to their faces.
The DD&A write offs are accelerated towards the front end of the production phase because the Ryder Scott reserves are very conservative, therefore shortening the time to amortise the DD&A over. For example, Fern says West Cameron is still in production and is likely to be so, albeit at prgoressively declining rates, for another 18 mths or so, but in the books the sunk costs will be fully written off by June 30. Therefore any revenue coming through post this write off will be 100% profit with no sunk costs attached, only the ongoing variable costs which are minimal.
Regarding the tax losses, the CFO told me they will run for another 3 yrs including the current year we are in.
I simply cannot fathom why they would want to take themselves private. No-one would lend them the money to do so. The more logical move would be to pay a dividend and this looks likely to be on the agenda in 2006, once Main Pass is brought into production.
Trading on earnings multiple of <3 said Fern.
Cannot understand why you were not there Sushi.
PSA Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
