debt, page-11

There was some commentary from MPW this morning on WPL that supports some of the previous postings. Below is an excerpt

"WPL is likely to experience funding gaps if the oil price stays at current levels and as CAPEX profiles grow. WPL will be unable to wait to tap more accommodating debt and equity markets. This is because it has already invested several billion $ in the Pluto project which it cannot now afford to lay idle as it would wreck the project economics.

WPL has talked of drawing down existing debt facilities and also raising a further US$1-1.5B in 1H09. We however don't think this will be enough.

If the oil price remains at $50/bbl between now and 2010, then WPL will need to raise a further US$1.5B on top of the existing funding plans.

Even if oil rises to US$60/bbl (which is unlikely in the short term) they still need an extra US$1B"

The commentary then finishes on a positive note

"Overall, despite the sector's growing funding concerns, we remain bullish on the long term outlook for oil and gas prices and so see significant underlying value in the sector. It is also worth noting that the industry largely shares our view that there will be a "V" shaped recovery in oil prices. However .... with growing financing and oil price risk in the short term, despite the significant value that we see, we believe there is little reason to get to build positions aggressively in the sector at the moment."

HT1