Even factoring in OPEC's decision to increase oil production
by 500,000 barrels per day starting Nov. 1, ''supplies are tight,''
said Addison Armstrong, an analyst at TFS Energy Futures LLC.
And according to analyst predictions, they're going to get
even tighter. Analysts surveyed by Dow Jones Newswires, on average,
expect today's report from the Energy Department will say that crude
oil inventories fell by 2.7 million barrels in the week ended Sept. 7.
Investors had already priced in OPEC's increase, and many were looking for a larger production boost, analysts said.
Light, sweet crude for October delivery rose 74 cents to settle
at $78.23 a barrel on the New York Mercantile Exchange after
alternating frequently between gains and losses. The settlement price
bested the previous record, set July 31, by 2 cents.
In Vienna, Austria, OPEC representatives agreed Tuesday to
increase oil production to meet an expected surge in winter consumption
and push prices down, even as they expressed concerns that a slowing
global economy might dampen future oil demand.
The surprise decision by members of
Some countries, such as Iran and Venezuela, had initially been
opposed to increasing supplies, a move backed by Saudi Arabia and other
Persian Gulf states.
The decision to increase OPEC supplies by about 2 percent is
the first official rise in more than a year and will be effective Nov.
1.
OPEC, which produces about 40 percent of the world's oil, had
long been expected to hold production levels steady. But rumors started
circulating on Monday that Saudi Arabia was campaigning to boost
production.
Many analysts think the Saudis are worried high oil prices
will crimp demand for crude, which could hurt OPEC nations in the long
run.
OPEC representatives said they were aware that excessively
high prices might put a dent on a world economy that is already
suffering from a weak housing market in the United States. Some oil
ministers attending the meeting said they did not want to be blamed for
worsening the world's economic woes.
OPEC also recognized the dangers that a slowing global economy
posed to its business. Many ministers here feared repeating the mistake
made in 1997 when the group boosted supplies just as the Asian
financial crisis was brewing. The result was a collapse in oil prices
the following year.
==============
NYMEX Sets New Energy Index Trade Date
© 2007 The Associated Press
NEW YORK — The New York Mercantile Exchange said Wednesday it will
launch its new alternative energy equity index futures contract on CME
Globex and NYMEX ClearPort electronic trading platforms on Sept. 30 for
a trade date of Oct. 1.
The contract was previously scheduled to launch on Aug. 20, but was postponed.
The contract is based on the Ardour Global XL Index, which is
comprised of 30 publicly traded companies providing exposure to a range
of businesses in the alternative energy market. It will be cash-settled
and the commodity code will be AX.
Shares of Nymex Holdings Inc., the parent of the New York Mercantile Exchange, rose 44 cents to $128.09 in afternoon trading.
----
Vista International, Inc. Announces Growth Plans for Renewable Energy and Sustainable Growth
Vista
International, Inc., announced on July 20th 2007, that it had signed on
July 13th 2007 a definitive stock purchase agreement to purchase
controlling interest in Nathaniel Energy (NECX) from its major
shareholder, Richard Strain. The transaction is scheduled to close by
July 27, 2007.
Denver, CO (PRWEB)
July 23, 2007 -- Vista International, Inc., announced on July 20th
2007, that it had signed on July 13th 2007 a definitive stock purchase
agreement to purchase controlling interest in Nathaniel Energy (NECX)
from its major shareholder, Richard Strain. The transaction is
scheduled to close by July 27, 2007.
Vista International is a progressive company that has been devoted to
the creation and expansion of businesses which supply innovative
products and technologies to the global community for more than 18
years. As a technology holding company, Vista International brings
together ideas and technologies which individually and in-concert
promote self-sustaining community development.
Our
objective is to maximize shareholder value within NECX by providing the
opportunity to offer diversified renewable energy products and services
in the near future
|
Vista International believes it’s important to understand the company, its plan for the technologies within the company and how they plan to incorporate NECX into the company’s overall strategy and operations. Vista International is committed to approaching business in a manner more innovative than most businesses in today’s fast pace environment.
Vista International stands for “Vision, Integrity, Science, Technology, Alternatives” (VISTA), the corner stone of how the company does business. Vista International believes it has the Vision to see opportunity when others do not; the Integrity to conduct business in a responsible, environmentally sound and sustainable manner, while assuring inventors or technology minded individuals have a fighting chance to succeed without the concern of being taken advantage of or seeing their technologies shelved; using Science to provide a healthier environment and alternatives for medical treatments which rely on traditional drugs or therapies; using Technology to improve our overall quality of life; and more importantly to use Alternatives that are not traditional but represent “out of the box” applications.
Vista International is committed first and foremost to create
manufacturing jobs in the U.S., resulting in the sustainable export of
our products, technologies and services into “all” the countries in
which the company has developed in excess of $10.5 Billion USD of
business opportunity in the waste-to-energy/fuels market during the
last 30 months. NECX is expected to benefit from the development of
this business pipeline.
Vista International has developed relationships on a global basis for
the deployment of all its technologies for the benefit of all its
shareholders and partners. The company’s relationships are broad and
extensive ranging from the executive corporate level to all levels of
government, and from the small local towns or villages to mega sized
cities in China, SE Europe, Mexico, the West Indies, Canada, Great
Britain, Europe and, of course, in the USA.
Vista International has developed and continues to develop strategic
partnerships with various US corporate organizations that have an
international presence to assist implementing the company’s global
growth plans. Vista International focuses on helping small companies
grow as they find small companies to be aggressive and innovative.
Vista International has been asked to participate in a number of
international organizations that will help expand its growth into other
countries where it has yet to explore business opportunities to deploy
its technologies, products and services. This exposure will also expand
the company’s presence in the countries where they already do business.
The company’s approach is to Build, Own and Operate (BOO) their
projects to assure success, protect the company’s IP and secure long
term positive cash-flow. According to Vista International’s Chief
Executive Officer, Johan C. Smith, “Our objective is to maximize
shareholder value within NECX by providing the opportunity to offer
diversified renewable energy products and services in the near future,”
similar to those offered by Vista International. These technologies
will focus primarily on waste-to-energy solutions, production of high
(120-130+) octane alcohol fuels, low wind speed turbines, full spectrum
energy saving lighting, clean affordable drinking water, portable power
stations and alternative engines.
Statements in this news release other than historical facts are
"forward-looking" statements within the meaning of section 27A of the
Securities Act of 1933and section 21E of the Securities Exchange Act of
1934. Since these statements involve risks and uncertainties and are
subject to change at any time, the Company's actual results could
differ materially from expected results.
For more information visit http://www.vistainternational.net or contact Johan C. Smith, CEO, Timothy A. Peach, CFO, or Barry Kemble, VP Business Development at 720-222-3032.
Canada Stocks Fall as Crude Oil Dips; Suncor, Cameco Lead Drop
By John Kipphoff
July 23 (Bloomberg) -- Canadian stocks fell for a second day, led by Suncor Energy Inc. and Cameco Corp., as the price of crude oil retreated, dragging down energy producers, the second-biggest industry group in the nation's main equity index.
The Standard & Poor's/TSX Composite Index dropped 114.54, or 0.8 percent, to 14,468.33 in Toronto. The benchmark has declined 1.1 percent in two days, after reaching a record on July 19 when crude oil rose, heading toward an 11 month high the next day.
Materials and energy stocks, accounting for more than two- fifths of the S&P/TSX, have helped the index rally 12 percent this year as rising prices for metals and energy boosted companies' profits and cashflows, spurring record takeovers in the global metals and mining industry.
``It might be the end of the cycle for energy stocks,'' said Andre Chabot, who helps manage about $287 million at Triasima Portfolio Management Inc. in Montreal. ``Commodities may have peaked or are no longer going up at a rate that will boost profits by a lot. We're in a bull market but we're cautious: the market may be vulnerable to going sideways for a while.''
Suncor Energy, the second-biggest oil-sands miner, dropped C$1.74 to C$98.35. Petro-Canada, the country's third-largest oil and gas company, fell C$1.50 to C$59.75 after reaching the highest ever on July 20. EnCana Corp., Canada's biggest natural-gas producer, lost C$1.01 to C$65 74.
Nexen Inc. retreated 87 cents, or 2.5 percent, to C$34.68. Ontario Teachers' Pension Plan, Canada's third-biggest pension fund manager, said on July 20 in a regulatory filing that it sold 6.5 million shares at C$33.75 apiece on July 18, or about 11 percent of its stake in the oil and gas producer. The sale is part of a ``rebalancing'' of its portfolio, Teachers' spokeswoman Deborah Allan said.
Oil Falls
Oil for September delivery fell 1.2 percent to $74.89 a barrel in New York, after Reuters reported that the Organization of Petroleum Exporting Countries may pump more oil to increase supplies, on concern that high prices may hurt the world economy. Futures reached $76.13 on July 20, the highest since Aug. 10. Prices are up 23 percent this year.
Shares of Cameco slid C$3.19, or 6.5 percent, to C$46.13, the most in nine months. The world's largest uranium producer said it will halt output of uranium hexafluoride at its Port Hope, Ontario plant for at least two months, after discovering that uranium and production-related chemicals contaminated soil beneath a conversion plant.
Cameco was also dragged down as shares of Centerra Gold Inc., a bullion producer that it controls, fell to the lowest since November 2005 on an analyst downgrade. Centerra Gold, which last week reduced its 2007 forecast of gold production by one-third from the Kumtor mine in the Kyrgyz Republic, fell C$1.28, or 15 percent, to C$7.48 for the worst drop in the S&P/TSX.
Rating Cut
CIBC World Markets' Barry Cooper cut the stock to ``sector performer'' from ``sector outperformer,'' citing ``uncertainties'' over the company's reserves and the potential for extended political discussions about Kumtor in the Central Asian country. The analyst expects these discounts will stay in place until the second half of 2008 and cut his 12-to-18-month share-price forecast to C$11 from C$15.
A gauge of energy shares, which includes uranium companies, declined 1.7 percent, the most among 10 industry groups in the index. A measure of raw-materials stocks slid 0.7 percent. Energy and raw-materials stocks together account for 45 percent of the S&P/TSX's value.
Other bullion miners dropped along with the price of the precious metal.
Shares of Agnico-Eagle Mines Ltd., owner of Canada's biggest gold deposit, dropped 81 cents to C$46.54. Goldcorp Inc., Canada's second-biggest producer, fell 14 cents to C$28.80.
Gold futures for August delivery fell 0.5 percent to $681.50 an ounce in New York, after gaining 2.6 percent last week. The metal on July 20 reached $687.60, the highest since May 9.
The following shares had unusual price changes.
Connors Bros. Income Fund (CBF-U CN) dropped the most in more than 8 months, falling 84 cents, or 7.9 percent, to C$9.81. The maker of canned fish and meat expanded a recall linked to botulism to include chili distributed in Canada and pet food.
Open Text Corp. (OTC CN) fell C$1.12, or 5.1 percent, to C$21.07. The maker of software that helps companies manage documents was cut to ``sell'' from ``hold'' by Canaccord Adams's Peter Misek, who cited ``unsustainable cashflow levels'' and integration risks related to the company's $390 million purchase last year of rival Hummingbird Ltd. The Toronto-based analyst also lowered his share-price forecast to the equivalent of C$18.79 ($18) from $25.
Southwestern Resources Corp. (SWG CN) declined 4 cents, or 1.8 percent, to C$2.23. The copper and gold explorer is being sued by shareholders after it said on July 19 that it reported flawed data at a deposit in China. The class-action suit was filed in Toronto by the law firms of Sutts Strosberg LLP and Siskinds LLP on behalf of anyone who bought Southwestern shares from Aug. 31, 2005, to July 18, 2007, the firms said. The shares have lost 65 percent of their value in three days.
Verenex Energy Inc. (VNX CN) added C$1.28, or 7.9 percent, to a record C$17.43. The Canadian petroleum explorer gained after partner PT Medco Energi Internasional, Indonesia's biggest non- state oil company, said it expects its Libyan area, which is operated by Verenex, to pump as much as 100,000 barrels of oil a day, double an earlier estimate.
Barrick Gold Corp. (ABX CN)
Cameco Corp. (CCO CN)
Centerra Gold Inc. (CG CN)
EnCana Corp. (ECA CN)
Goldcorp Inc. (G CN)
Nexen Inc. (NXY CN)
Petro-Canada (PCA CN)
Suncor Energy Inc. (SU CN)
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net
----
from: "opportunities-a-plenty"
2 weeks a go, I posted on alternative investment opportunities that dealt primarily with alternative energy. In a related note, earlier today VeraSun, who happens to be the U.S.'s 2nd largest producer of ethanol, announced they would be boosting their annual ethanol production capacity by 330 million gallons through the acquisition of 3 plants in Nebraska, Ohio, and Indiana. To fund the transaction, they'll be giving the purchasee, ASAlliances BioFuels LLC, a $200 million equity stake, and chipping in $250 million in cash to go with $275 million in project financing.
The
3 ethanol plants are yet to be on-line, but by the time all three are
producing at full capacity, projected to be early in Q1, 2008,
VeraSun's total ethanol production should be about 1 billion gallons
per year. The news of the acquisition comes soon after VeraSun's (VSE)
52 week low, reached on Friday, July 20th . The news rallied
the stock from the low of $13.01 at Friday's close, to the upper $13's
at the time of this post. Time will tell if the rally continues. After
peaking at almost $27 in November, VeraSun has been on a downward
slide. Will this deal arrest the plunge?
In
other interesting alternative energy related investing news, Quantum
Fuel Systems Technologies Worldwide Inc. (NASDAQ:QTWW) indicated this
morning they would be supplying GM with 3 liquid hydrogen refueling
stations to facilitate the auto giant in the demonstration of new
hydrogen fuel cell vehicles. Quantum also produces the fuel cells used
by GM in the technology demo vehicles.
In
a press release this morning from Quantum's Irvine, CA offices, Alan P.
Niedzwiecki, President and CEO said the following: "Our transportable
hydrogen refueling stations are designed to support our customers as
they advance their hydrogen fuel cell vehicle initiatives and are
helping to establish the foundation of a hydrogen refueling network.
The high pressure storage systems developed by Quantum, which these new
refueling stations support, translate directly into a greater vehicle
driving range for hydrogen fueled vehicles, a critical factor for the
commercialization of fuel cell vehicles." Since a close of $3.29 a year
ago, Quantum has been slowly regaining ground, with a nice 40% spike
last month that's mostly been given back. At the market's close on
Friday, it's stock sat at $1.42, up from a $1.06 close in late April.
GM
has also recently demonstrated a hydrogen fuel cell vehicle that has a
300 mile range. With the clamoring to free the U.S. and other countries
from foreign oil dependence, this technology is just another promising
development. For years, hydrogen fuel cell technology has held promise,
but only recently has it shown the capability to offer both the range
and power demanded by consumers in an actual vehicle. We'll see if the
new developments in this field continue. GM plans on introducing
production fuel cell vehicles in the future. Earlier this month at the
Berlin Auto Show, the General showed its new HydroGen4 concept vehicle.
In 2008 they will test 10 of the cars in Europe.
Last month at an event in Canada, Nick Zielinski, Chief Engineer of Advanced Vehicle Development for General Motors, showed several advanced fuel vehicles, including a version of GM's Volt electric hybrid concept that uses GMs 5th generation fuel cell instead of a conventional, internal combustion power plant. In a heads up, GM has also announced the award of battery development contracts for it's next generation of hybrid vehicles. The two competing teams are from Compact Power Inc. and LG Chem, and a team from tire manufacturer Continental and A123. In addition, GM moved 500 engineers from advanced vehicle R&D to advanced vehicle production and engineering. Design targets include an advanced power train with a life cycle of greater than 150,000 miles in real world use.
Ballard Announces Second Quarter 2007 Results
Ballard Power Systems (TSX: BLD)(NASDAQ: BLDP), a world leader in the development, manufacture and sale of hydrogen fuel cells, announced its operating and financial results for the quarter ended June 30, 2007 today. All amounts are in U.S. dollars, unless otherwise noted.
"We continued to grow revenues and reduce cash burn in the second quarter, consistent with our full-year guidance," said John Sheridan, Ballard's President and Chief Executive Officer. "Year-to-date revenues were 27% higher than the same period last year. Ballard has shipped a total of 297 fuel cell products in our near term markets so far this year - growth of 52% over the first half of 2006."
Financial Highlights: Second Quarter 2007
- Revenue growth of 15% to $14.3 million (2006Q2: $12.5 million).
- Product and service revenue grew 7% to $10.5 million (2006Q2:
$9.8 million), driven by higher non-recurring engineering services for
backup power and materials handling customers and material products
shipments.
- Engineering development revenue grew 43% to $3.8 million (2006Q2: $2.7 million).
- Reduction in loss from continuing operations to $10.8 million
(2006Q2: $13.6 million). This 21% improvement was primarily due to
higher engineering development revenues, gross margins and foreign
exchange gains, partially offset by increased operating expenses,
largely for research and development for fuel cell bus programs and
power generation products.
- Reduction in operating cash consumption (Endnote 1) to $3.8
million (2006Q2: $8.1 million). This 54% decrease was primarily due to
higher gross margins, engineering development revenues and foreign
exchange gains, partially offset by increased research and development,
along with the timing of customer collections. For the six months ended
June 30, 2007, operating cash consumption of $19.9 million was
comparable to 2006.
- Cash reserves of $167.6 million (2007Q1: $174.8 million).
Financial results are on track for the year and full-year financial guidance for 2007 is reconfirmed:
- Revenue from continuing operations is expected to be in the range of $55-65 million, growth of up to 30% over 2006; and
- Operating cash consumption (Endnote 1) is expected to be in the range of $40-50 million, a reduction of up to 20% over 2006.
Operational Highlights: Second Quarter 2007
Residential Cogeneration
Ballard shipped 119 fuel cell products this quarter, for a total of
190 units year-to-date. This compares with 102 units shipped in the
second quarter of 2006. The company expects to meet or exceed its
shipment goal of 400 units in 2007.
Product development activities for the next generation Mark1030 V3
product are on track for delivery of this lower-cost cogeneration
system with a 40,000-hour lifetime in 2008.
Prototype assembly operations for the new Mark1030 V3 product are
also well underway at EBARA BALLARD, the company's joint venture in
Japan. Ballard is on track to meet its goal of completing this transfer
by the end of the year. The Japanese facility doubles the company's
assembly space and expands Mark1030 production capacity.
Materials Handling
Ballard shipped 51 fuel cell products this quarter, for a total of
54 units year-to-date. This is an increase over the 36 units shipped in
the second quarter of 2006. The company has previously indicated that
acquisition and subsequent integration activities related to Plug
Power's purchase of Cellex Power and General Hydrogen, as well as a
longer-than-expected sales cycle, would reduce its materials handling
sales for the year. During the quarter, Ballard signed an initial
two-year agreement with Plug Power to supply fuel cell stacks for all
its commercial sales in the materials handling market through April
2009. Plug has not released any specific forecasts at this early stage.
As a result, Ballard is not in a position to indicate a shipment target
for the remainder of 2007.
Ballard is on track to meet its goal of reducing Mark9 SSL(TM) product costs by 25% in 2007.
Backup Power
Ballard shipped 46 fuel cell products in the second quarter, for a
total of 53 units year-to-date. Shipments in the quarter were primarily
to the company's lead customer, Dantherm Air Handling.
Automotive Programs
Ballard's Mark1100 automotive fuel cell stack development program
and its next generation automotive development program progressed on
schedule. The related $1.8 million of engineering development revenue
reflected the company's achievements in the second quarter. Ballard
also surpassed its outstanding durability goal for 2006 of 2,300 hours.
Financial Results: Second Quarter 2007
Ballard's revenues for the three months ended June 30, 2007
increased 15% to $14.3 million, compared to $12.5 million for the same
period in 2006. During the second quarter of 2007, product and service
revenues increased $0.7 million, or 7%, and engineering development
revenue increased $1.2 million, or 43%, compared to the same quarter
last year. Product and service revenues totaled $10.5 million for the
current year quarter with product revenues of $7.1 million and service
revenues of $3.4 million, compared to product revenues of $6.1 million
and service revenues of $3.7 million in the second quarter of 2006. The
increase in product revenues is driven by higher shipments of
automotive fuel cell products and material products. This was offset by
lower revenues for 1kW residential cogeneration fuel cell product
reflecting lower pricing but on higher volumes. Service revenues
decreased as increases in non-recurring engineering services for power
generation customers were offset by a decline in automotive service
revenue. The increase in engineering development revenue resulted from
work performed and achievement of the milestones under the automotive
fuel cell and 1kW residential cogeneration fuel cell development
programs.
Ballard's net loss for the three months ended June 30, 2007
decreased 36% to $11.1 million, or ($0.10) per share, compared with a
net loss of $17.3 million, or ($0.15) per share, for the corresponding
period in 2006. The loss from discontinued operations decreased $3.4
million and reflects the sale of Ballard's electric drive operations in
early 2007.
Ballard's loss from continuing operations for the three months ended
June 30, 2007 was $10.8 million, or ($0.10) per share, compared to
$13.6 million, or ($0.12) per share, for the corresponding period in
2006. For the second quarter of 2007 compared to 2006, increased
engineering development revenues, gross margins and foreign exchange
gains were partially offset by an increase in operating expenses. The
increase in operating expenses was primarily as a result of increased
research and development activities, reflecting increased investment to
build capability and capacity for growth in such areas as Ballard's
fuel cell bus and power generation programs. Ballard's gross margins
for the three months ended June 30, 2007 improved over the same period
in 2006 due to positive warranty adjustments and increased margins on
Ballard's power generation non-recurring engineering services and
carbon fiber products.
Operating cash consumption (Endnote 1) for the three months ended
June 30, 2007 decreased 54% to $3.8 million, compared to $8.1 million
in 2006. The decrease in operating cash consumption over the prior year
was driven by the sale of Ballard's electric drive operations in the
first quarter of 2007, higher gross margins, engineering development
revenue and foreign exchange gains along with lower working capital
requirements, partially offset by an increase in research and
development costs.
The operating cash consumption for the second quarter of 2007, $3.8
million, was significantly lower than the first quarter of 2007, $16.1
million, as the second quarter was positively impacted by foreign
exchange gains and the timing of collections from customers, whereas
the first quarter of 2007 was higher due to the annual payment of 2006
employee bonuses and cash requirements related to the company's
electric drive operations. For the six months ended June 30, 2007,
operating cash consumption of $19.9 million was comparable to 2006.
----
Plug picks up pace of installing fuel cells
Shares rise even as company reports larger 2nd-quarter loss than same period in '06
By LARRY RULISON, Business writer
Click byline for more stories by writer.
First published: Thursday, July 26, 2007
COLONIE -- Plug Power Inc. has installed 104 of its GenCore fuel-cell
systems at customer locations so far this year -- more than in all of
2006 -- on its way to a goal of 400 by the end of December.
Plug executives made the announcement Wednesday morning during a
quarterly conference call with analysts. The company also reported it
lost $16.7 million in the quarter, up from $13 million for the same
quarter last year.
The larger loss was due in part to operating results of two Canadian
fuel-cell manufacturers acquired in the spring, along with $2 million
in service and warranty costs for Plug's GenCore product.
GenCore is a fuel-cell system that traditionally has been used by
telecommunications companies to provide backup power to cellphone
towers.
In the spring, Plug acquired Cellex Power and General Hydrogen, both in
the Vancouver, British Columbia, area that make fuel cells used in
forklifts and similar types of vehicles. Those products, which will now
be made at Plug's Latham headquarters, have been branded as GenDrive
fuel cells.
Plug also said it is planning to consolidate the two Canadian
companies' operations into one that will be in Richmond, British
Columbia. About 70 people will work there, although more staff may be
added over time. Plug employs about 380 people worldwide.
The pace of GenCore installations is much quicker than last year.
During the second quarter, 41 systems were installed, compared with 17
during the same period in 2006.
Although Plug is nearly 300 installations away from meeting its
year-end goal, company officials sounded optimistic that the number
would be achieved. CEO Roger Saillant said installations typically pick
up in the second half of the year.
"We continue to aggressively pursue this milestone," he said.
Saillant also said the company has made GenCore sales to the National
Guard in New Mexico, a relationship that could expand next year.
"We're already leveraging this program for a wider rollout in the military," Saillant said.
Plug shares (Nasdaq: PLUG) ended trading Wednesday at $3.16, up 16 cents, or 5.33 percent.
----
Alternative Energy companies taking advantage of the recent run with ‘Stock offerings’
Who can blame the Solar and Wind Energy companies. Their stock prices are at all-time high’s and everyone (Wallstreet, Politicians (at least they say they do) and the average Joe) loves them. Everytime you think they are too expensive they keep proving you wrong and keep making new highs.
Of course they are going to take advantage of this and offer more stock. The news release date is in parenthesis
Solar Energy Stocks
- Sunpower (Nasdaq: SPWR): Solar panel maker SunPower Corp. plans a public offering of about 2.5 million class A shares and $175 million in senior debt. (July 19th, 2007).
- Trina Solar (NYSE: TSL): Priced
a follow-on public offering of about 5.4 million American depositary
shares at $45 each. The stock fell to low 40’s the day news was
announced but is now trading in the low 60’s. I think about buying
Trina Solar everytime it falls but never pull the trigger and then it
takes off (June 1st, 2007) - First Solar (Nasdaq: FSLR):
Filed to raise about $1 billion in a stock offering. The company plans
to offer 9.65 million shares in the stock offering. As William Trent pointed out
the price fell far less then expected. I couldn’t agree with him
more. Of course, I am the fool who got burned shorting First Solar.
For the last few weeks or so I have made up some of my losses by buying
Call Options but still in red overall. Right now I only own Put
Options. This could still shoot up any day so I might buy Call options
in next few days to hedge my short position. Just an incredible run so
far for First Solar but sooner or later is had to end. Doesn’t it? On
a side note, look at how much money First Solar’s CEO has made so far. (July 20th, 2007) - Evergreen Solar (Nasdaq: ESLR): Evergreen
Solar Offering of 15 Million Shares Priced at $8.25. The company
expects proceeds of about $117.4 million, which will be used on
manufacturing expansion, on raw materials and as working capital. (May
24th)
Wind Energy Stocks
- American Semiconductor (Nasdaq: AMSC): Offering 4.7 million shares priced at $21.25 a share. I owned options on AMSC a few months ago and sold them for over 100% gains. Could have made much more if I would have held on. (July 20th, 2007)
Can’t blame these companies to take advantage of these
booming times. The effect on their stock price seems negligible after
the news and in most cases are trading higher now. So who’s next in
line for a Stock offering?
* I own Put Options of FSLR and might buy some calls in the next few days. I might also buy Put or Calls on any of these companies in the coming days.
----
The End of Cheap Oil?
The new cycle of resource nationalism is bad news
Crude oil prices rose above $74 per barrel this week and Goldman Sachs warned that the world could be facing $95 per barrel oil by this fall. Later this week the National Petroleum Council (NPC), which advises the Secretary of the Department of Energy, will release a new report
which will find that conventional oil and gas supplies are not likely
to keep up with growing global demand over the next 25 years. Of
course, supply and demand must balance, so what the Journal is telling us is that the NPC thinks high oil prices are here to stay.
The sobering news about oil prices was preceded by the International Energy Agency's (IEA) Medium Term Oil Market Report
(MTOMR). That report looked at energy supply and demand projections
through 2012. The IEA was founded by the 26 members of the Organization
of Economic Cooperation and Development (OECD) during the 1970s energy
crisis to analyze and advise on global energy trends. The IEA projects
the global demand for oil will rise by 1.9 million barrels per day or
2.2% per year on average, reaching 95.8 million barrels per day by
2012, up from 86 million today. Non-OPEC production is forecast to
increase between 2007 and 2012 by a modest 2.5 million barrels per day.
OPEC currently has spare production capacity of 3 million barrels per
day and the IEA expects OPEC production capacity to rise by 4 million
barrels per day by 2012.
Has the peak of world oil production arrived? The IEA report says probably not. The IEA notes that "the concept of peak oil production and its timing are emotive subjects which raise intense debate." Nevertheless, the IEA acknowledges that its new five-year forecast suggests that non-OPEC production "appears, for now, to have reached an effective plateau, rather than a peak." Let's put aside the question of how a plateau differs from a flat peak. The IEA reminds us that much depends on the definition of "conventional" oil production. Offshore oil was once unconventional and depending on technology and economics ultra-deep sea oil and tar sands may become conventional sources of crude. In addition, the IEA, while noting hydrocarbon supplies are finite, argues that the chief barrier to increasing medium-term production is access to reserves and the underinvestment in production infrastructure.
The resurgence of resource nationalism bears a good bit of the responsibility for the glum oil supply projections-what I've previously called "political peak oil." Seventy-seven percent of world oil reserves are owned by national oil companies. Unfortunately, national oil companies are located in technologically backward countries without access to world-class production expertise and adequate supplies of capital. As the IEA diplomatically puts it, "Often political and social spending needs grow to the point where oil exploration and development investment is compromised, in turn reducing oil and gas exports." And this is happening. Major oil producers such as Venezuela, Mexico, Russia, and Iran are using oil revenues to bribe their people and not investing enough to maintain future oil production.
To make matters worse, Venezuela is seizing a number of oil production projects operated by private international companies. Russia has done the same. Few investors are eager to invest in oil production in Iran and Iraq given current geopolitical realities. The IEA projects that there will no net expansion in oil production in Venezuela, Iran, Iraq, and Nigeria between now and 2012. In addition, spare global production capacity is currently at 3 million barrels per day and is expected to fall to 1.5 million barrels per day by 2012. Thus any disruption in production anywhere in the world will boost prices.
How much oil is left? The U.S. Energy Information Administration's International Energy Outlook 2007 calculates that world proven reserves of oil are 1.3 trillion barrels and projects that world consumption will rise to 118 million barrels per day by 2030. In 2002, U.S. Geological Survey researchers estimated that 3 trillion barrels of conventional oil remain to be recovered. "It's not peak oil: it's in the ground, we know where a lot of it is, but it's getting it out," said Leo Drollas, an oil expert at the Centre for Global Energy Studies in the Guardian.
The IEA report notes that the world has once before experienced a political boom/bust cycle in oil production. The previous bout of resource nationalism in the 1970s spawned high oil prices which, in turn, reduced demand and encouraged exploration for new supplies. Eventually, reduced demand and increased supplies combined to dramatically lower prices and which then cut the revenues flowing to oil state regimes. And the cycle continued as cash-strapped oil state regimes in the 1980s anxiously sought to boost their flagging revenues by inviting international oil companies to come back. The good news is that market forces eventually bring oil nationalists to heel. The bad news is that the process is far from pleasant for the world's economy.
Disclosure: Those 50 shares of ExxonMobil that I own are looking pretty good, but they don't make up for the amount I have to pay at the gas pump.
Ronald Bailey is Reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.
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$100 Oil Price May Be Months Away, Say CIBC, Goldman (Update1)
By Mark Shenk
July 23 (Bloomberg) -- The $100-a-barrel oil that Goldman Sachs Group Inc. said would prevail by 2009 may be only a few months away.
Jeffrey Currie, a London-based commodity analyst at the world's biggest securities firm, says $95 crude is likely this year unless OPEC unexpectedly increases production, and declining inventories are raising the chances for $100 oil. Jeff Rubin at CIBC World Markets predicts $100 a barrel as soon as next year.
``We're only a headline of significance away from $100 oil,'' said John Kilduff, an analyst in the New York office of futures broker Man Financial Inc. ``The unrelenting pressure of increased demand has left the market a coiled spring.'' New disruptions of Nigerian or Iraqi supplies, or any military strike against Iran, might trigger the rise, Kilduff said in a July 20 interview.
Higher prices will increase revenue for energy producers from Exxon Mobil Corp. to PetroChina Co., while eroding profit at airlines including EasyJet Plc and railroads such as Union Pacific Corp. The U.S. and other oil-importing nations risk accelerating inflation, while higher energy costs threaten to restrain growth.
Benchmark crude oil futures ended last week at $75.57 a barrel on the New York Mercantile Exchange, up 51 percent since mid- January and twice the level of early 2003. A record number of options have been sold that give the buyer the right to buy crude oil at $100. The contracts, covering 50 million barrels, only pay off should oil go above the target price. September crude futures fell 89 cents to $74.90 at 11:16 a.m. in New York today.
Goldman's View
Arjun Murti, a New York-based Goldman Sachs analyst who covers oil producers and refiners, roiled markets in March 2005 with a report saying prices could touch $105 a barrel during a ``super spike'' period because demand was stronger than anticipated. Price swings might also go as low as $50, Murti said at the time.
Currie, Goldman's global head of commodities research in London, is predicting that oil prices will probably touch a record and stay at unprecedented levels for months or years. The all-time high for Nymex crude futures is $78.40 a barrel on July 14, 2006.
``Ultimately, the key to the outlook going forward is when will Saudi Arabia ramp up production,'' he said in an interview. ``If you have a situation in which inventories globally get drawn to critically low levels, the volatility in this market is likely to explode, which significantly increases the probability of $100 oil.'' Oil might slip to $73.50 if OPEC were to start producing more now, he said.
The Organization of Petroleum Exporting Countries is scheduled to next meet in September. No members have called for a gathering before then. A decision to raise output at that time would lead to greater supplies toward the end of the year.
Accelerating Demand
The failure of near-record fuel prices to restrain global oil demand growth is what concerns Rubin, chief strategist at the brokerage unit of Canadian Imperial Bank of Commerce in Toronto.
``Prices have doubled, and demand is alive and well and accelerating,'' Rubin said in a July 18 interview. ``The argument that rising prices would choke demand and bring increased output is falling to the wayside.''
A National Petroleum Council study led by former Exxon Mobil chairman Lee Raymond, released last week, predicted a growing gap between production and demand for oil and gas during the next two decades. As recently as 2005, Raymond said oil prices had probably peaked and dismissed the possibility that supply and demand could not be brought back into balance.
``There are questions about whether the oil industry can keep up with demand,'' U.S. Energy Secretary Samuel Bodman said last week, commenting on the Petroleum Council report.
Gasoline Sales Rise
Gasoline pump prices averaging more than $3 a gallon across the U.S., the consumer of 25 percent of the world's oil, haven't dented sales. Deliveries of gasoline were a record 9.23 million barrels a day in the first half of this year, according to a July 18 report from the American Petroleum Institute in Washington.
``It appears that high prices are acceptable to the American consumer,'' said Robert Ebel, chairman of the energy program at the Center for Strategic and International Studies in Washington. ``People want the house with a yard and white-picket fence so they are moving further and further out of the cities. They have to just get up earlier and drive further.''
Outside the U.S., demand increases are being led by India and China, where growing economies mean more cars and trucks and more factories that burn oil and gas.
Consumption between now and the end of the year will increase by 3.6 million barrels a day because of seasonal shifts. The rise is equal to the daily production of Kuwait and Oman combined, and it comes after OPEC twice in the past year cut production to support prices.
Rising Costs
The cost of finding and pumping oil is rising steadily, convincing analysts such as Rubin and Deutsche Bank AG chief energy economist Adam Sieminski that higher prices will last. Shortages of deepwater drilling ships and rigs has pushed daily rents to records, and the skilled workers needed to run rigs, weld pipes, pilot vessels, fix refineries and build oil-sands projects command ever-higher wages.
``Three years ago we were calling for $30 oil, then $35 and then $40 oil,'' said New York-based Sieminski, who last week raised his forecast for the average price of oil in 2010 to $60 a barrel from $45.
``I've gotten tired of increasing these forecasts in $5 increments,'' Sieminski said in an interview. ``Something has happened. Costs have continued to escalate, and the geopolitical situation has gotten worse.''
The $60-a-barrel forecast for 2010 is 15 percent higher than the average analyst forecast, Sieminski said. The projection probably will turn out to be too low, he said.
Oil prices could triple in three months to more than $200 a barrel, given the right circumstances, according to Matthew Simmons, chairman of Simmons & Co., a Houston investment bank.
`Still Cheap'
``Oil is still cheap,'' Simmons said. ``In the 20th century, with a few exceptions, oil was almost free. The only exceptions were during 1973, 1979 and when Iraq invaded Kuwait.''
Prices rose in 1974 after an oil embargo that followed the Arab-Israeli war and from 1979 through 1981 after Iran cut oil exports. The average cost of oil used by U.S. refiners was $35.24 a barrel in 1981, according to the Energy Department, or $79.67 in today's dollars.
While crude oil prices are approaching the records they set at this time last year, not everyone is convinced $100 crude will happen. From their peak, oil futures began a six-month slide. They got below $50 on Jan. 18 before rebounding.
``The risk parameters are somewhat different than a year ago, however the overall situation is similar,'' said Tim Evans, an energy analyst at Citigroup Inc. in New York who correctly predicted a year ago that oil prices were at a peak. ``We've priced in a shortage that is not evident yet.''
Pickens' Opinion
A pullout from Iraq may be the event that pushes oil to $100 a barrel, according to Boone Pickens, the Dallas hedge fund manager who has joined Forbes Magazine's list of billionaires because of his bullish bets on energy prices. Pickens predicted a year ago that $100 oil would probably occur by now. Today he is looking for $80 within six months, and he says growing chaos in Iraq would be a bad sign. ``That could run prices pretty high,'' he said.
Goldman Sachs's Currie also notes similarities to a year ago, with global inventories at about the same level and U.S. government data showing an increasing bet on higher prices.
``At face value this market is strikingly similar to a year ago,'' Currie said. ``What is different? Supply is down a million barrels a day, demand is up a million barrels a day. The market is in a deficit.''
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .
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Crude Oil Falls on Expectations of Rising U.S. Gasoline Stocks
By Gavin Evans
July 23 (Bloomberg) -- Crude oil fell a second day in New York on signs U.S. fuel stockpiles may increase as refiners increase output.
Gasoline futures dropped last week after U.S. refiners raised operating rates to a seven-week high and Exxon Mobil Corp., BP Plc and Valero Energy Corp. restarted units in Texas. Gasoline extended last week's 2.7 percent decline today on signs higher production will restore below-average U.S. inventories.
``Ultimately that is going to be a consideration'' for oil prices, said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``I don't know that that is going to happen immediately.''
Crude oil for September delivery fell as much as 44 cents, or 0.6 percent, to $75.35 a barrel, in after-hours electronic trading on the New York Mercantile Exchange. It was at $75.48 at 8:20 a.m. in Singapore.
The contract fell 28 cents to $75.79 on July 20. The August contract, which expired the same day, fell 35 cents, or 0.5 percent, to $75.57 after earlier reaching $76.13, the highest intraday price for the front-month oil contract since Aug. 10.
Gasoline demand in the U.S., the world's biggest oil user, has peaked in June or July in four of the past five years.
``The roll from the summer months to a shoulder season month is significant,'' said Tobin Gorey, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``We still think that prices are going to stay high. But that doesn't mean they're going to shift outside the usual seasonal patterns.''
Recent Gains, Brent
New York oil prices rose 18 percent the past seven weeks after unexpected declines in U.S. gasoline inventories and as oil output cuts in Africa pushed Brent futures near a record.
Brent crude oil for September settlement was at $77.35 a barrel today, down 29 cents, on the London-based ICE Futures exchange. It fell 3 cents on July 20.
Gasoline for August delivery fell 0.89 cents, or 0.4 percent, to $2.1557 a gallon in after-hours trade. It fell 1.2 percent to $2.1646 on July 20.
Oil prices have moved more than $1 a barrel in a day in recent weeks and it's not clear whether they can get to the record $78.40 a barrel reached last year, Cameron Hanover's Beutel said.
``It's going to be a very tough two weeks here or so while this market tries to decide,'' he said. ``I'm not convinced that we're done with the upside yet.''
Oil reached a record last July after Israeli troops crossed into Lebanon to attack Iranian-backed Hezbollah forces. Iran is the second-biggest oil producer in the Organization of Petroleum Exporting Countries.
OPEC, Speculators
OPEC pumps 40 percent of the world's oil and will review its current production ceiling at a meeting Sept. 11. The group last week increased its fourth-quarter demand forecast for its members' oil to 31.1 million barrels. It pumped about 30 million barrels a day in June, according to a Bloomberg survey.
Last year's record price ``was all event-risk,'' Commonwealth's Gorey said. ``This year is all supply-demand stuff. OPEC could put an extra half a million or a million barrels on the market very easily.''
Hedge-fund managers and other large speculators trimmed their bets on rising oil prices last week, according to U.S. Commodity Futures Trading Commission data.
The speculative net-long position in New York oil futures, the difference between orders to buy and sell crude, fell to 109,423 contracts on July 17, down 2.6 percent from a record the week before. Contracts to sell oil rose 0.5 percent.
Crude oil was expected to fall this week, according to a Bloomberg News survey of 33 analysts on July 19. Fourteen, or 42 percent, said oil prices would decline. Twelve, or 36 percent, said prices will increase and seven forecast little change.
To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net
