J Mueller

20 Comments

    • Penn West Energy: More Questions Than Answers [view article]
      I believe Canroys must payout dividends at least equal to their net income. If so, PWE will have to raise the dividend by q3. I don't know if that requirement is quarterly or annual. I'll send an email to investor relations as well.

      Hey, you guys know that the 192,000 BOE a day was based on the fact that the deal did not close until January 10. If it had closed Jan 1 they would've had around 202,000.       Jun 03 12:56 AM
    • Still Bearish on Financials - Stop Trading! (5/29/08) [view article]
      Hmmmm, Doug Kass or Cramer.

      Cramer doesn't even deserve to have his name on the same page. I'd put my money on Kass.       May 30 11:35 AM
    • Penn West Energy: More Questions Than Answers [view article]
      So let me get this straight. You guys are pissed because PWE was short about $20 million dollars to cover their cash flows? They also spent about $40 million more in capital expenditures than they said they will. Do you realize that the average prices rec'd were about $7.90 NG and $85 Oil?

      They also were short 10 days production form the 2007 acquisitions as they didn't close until Jan 10.

      It should be very interesting to see Q2 earnings. I say Q2 Net Income will be close to $1.00 a share. If their Capital Budget comes in at $240 million and pay out $380 million dividend they will have around $170 million to pay down debt.

      I still show that funds from operations will be around $3 billion this year if the current prices hold.

      I'm with Jack. $50 by year end!!       May 29 07:06 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Dave, just to show how incompetent that BMO ANALyst is, here are PWE numbers for Q1.

      The Capital Budget was higher than their forecast of $240 million and came in at $278. Their Distributions were $382 million. This equals $660 Million.

      Energy prices were $7.98 and $88 for NG and OIL. Their free cash to pay these items was around $630 million. This puts them short $30 million to be flat. Your boy at BMO said his assumptions were:

      "His assumptions are oil at $100 both years and NG at $8.10 and $7.75 for the two years. "

      His "guess" is off by a boatload as some of the hedges fall off and they will get more for their NG & Oil next year. I can't believe he is that far off and it is his job to model these things.

      I was off on my calculation as I gave PWE credit for the combined company at the beginning of the year instead of starting on the 10th. This would have given PWE about another 10,000 BOE equivalent a day which would be other $40 million in cash. Also, they stated their capital budget would be $240 million not $278 million. We'll have to see if they increase that estimate.       May 13 04:34 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Whoops, PGH Capital Budget $167 million, not $267 May 12 06:20 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Haven't looked at them. I like the Oil/NG stocks I can model and the information is public about the futures prices and their hedges.

      I've looked at PGH and don't like their numbers. For Q1 they paid out more than their funds from operations. Fund from operations was $216 million. Their dividends and capital budget were $267 and $94 million for negative cash flow of $45 million.

      PWE had positive cash flow and I believe AAV will be the same. I believe AAV will be forced to raise their divi this year.

      HTE, I'd have to model their refining operations. I know Q1 was a meltdown for refiners. However, if they refine heating oil/diesel they would be rocking as crack spreads are above $25 for at least the next year.

      BTE has already raised their divi and the LUV for that is already baked in.

      Hey, as a Royalty Trust. I assume there is regulatory requirements of the amount of cash that must be paid for divi. Does anybody know that? I thought I read that they must pay at least the amount equal to their net income as a divi?
      May 12 04:06 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Surfin Sue. Don't discount this so fast. Go find me another stock that yields 11% after the 15% discount to hold it in your Roth? I believe, like Jack, that there is some upside as well.

      Look at the US version of it. PBT. They 8.80% and don't have the advantage of increasing production like PWE.

      If I wasn't so long this stock I might put some in an 401/IRA/Roth.       May 12 02:30 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Jack, if you really feel that NG and Oil are going to go below $107 and $8.50 you can short them. If you really want a free trade, go Long PWE and AAV and short OIL and NG. Why? AAV and PWE are not getting credit for $125 Oil and $11 NG.

      The Dividends are safe as long as oil is $80 and and NG is around $8. So, buying the $100 put in Oil and $8 put in NG can be paid for by the divi and you will be heavily in the money before the divi would be decreased. Oh, that's also assuming all this production money doesn't provide for increased production.

      BTW, I'm somewhat concerned about the AAV "collar" (so, Jack may have something on the AAV management quality). That's a dumb thing for AAV to do considering they are a producer? Texas Hedge? However, it worked. As long as they disclose their "Hedging" monthly, I can run the marks myself.

      That being said. Both AAV and PWE loaded up with mergers when NG and Oil were much lower and these mergers are now highly in the money.       May 12 11:00 AM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Ok, Dave. I use the futures prices. The are backwardated so I'm actually using lower prices in the future months for my calculation. That's the best we have.

      AAV cut their divi when OIL and NG prices were tanking. Just take a look the the rotten 6.75 hedge PWE put in for NG.

      THe fact of the matter is that the DIVI for PWE is extremely safe with Oil at $100 and NG at $8. That goes for AAV as well.

      BTW, I didn't use the pie in the sky assumptions that Goldman is puking out. Oil at $200 in the next two years? That looks pretty good to me.

      If you are really bearish on PWE as you appear to be, sell your shares. If you really believe that PWE will not have enough money to pay down debt, sell your shares.

      However, take a look at PWE Q1 numbers. They had $1.76 of funds from operations which adds up to about $682.5 million dollars. The divi and the capital budget combined is $620 million. That's free cash flow of $62 million. GO take a look at energy prices from Q1 to Q2 and rerun those numbers.

      If you rely on an ANALyst to run your numbers you are behind the curve and may as well give your money to a mutual fund.       May 12 09:55 AM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      I own both PWE and AAV.

      Jack, AAV cut their divi in Q4 and if you use the cut divi for Q4 you would get a payout ratio of 62%. Also, AAV states in a presentation on their website that the payout ratio would be 61% if OIL $80 and NG $7.50. If Oil $95 and NG$ 9.50 their payout ratio would be 54%. Add to the extra 2,000 BOE they get when oil gets above $105 due to the call and it looks pretty good.

      PWE payout ratio was below 60% and AAV will probably be about the same. PWE still has not released detailed financial statements for Q1.

      AAV is a better takeover target such as PWI as they are smaller.

      DAVE, the ANALyst a BMO is a moron and should be fired. PWE will have around $750 million of free cash flow after paying the DIVI and Capital Budget. That is assuming OIL and NG stay at their present levels.


      May 11 05:50 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Jack, the 105 call was for 2,000. At todays prices of $125 the would be 125 -105 or 20 BOE. So 2,000 per day for 91 days = 182,000 BOE. 182,000 X $20 = $3,640,000 in additional revenue per quarter. That's like increasing their oil production 15%.

      Well, AAV did decrease their divi on Oil/NG weakness last year. They said at the YE conf call that they would not be raising their divi and would put that any extra money to work on production. However, I don't believe they foresaw $11 plus NG and $125 oil.

      They will have to do something to get their share price up as they are pretty cheap and would be an easy takeover target. I owned PWI before the takeout and would assume the rest of the Canroys are getting looked at. I remember Cramer bragging about BTE but it has much more Heavy Oil. I think AAV is a better play.       May 10 03:59 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Hmm, time to take a look at AAV. I was reading their Mgmt. discussion for 2007 and stumbled upon a gem. Check out their hedging discussion. It says they purchased a collar. Well, upon further review, it appears they were bullish on Oil and instead bought back a hedge. They sold a $70 put and purchased a $105 call.

      I will admit that was a bold, perhaps crazy, bet. But, it worked.

      We'll see from their financials how this plays out.       May 10 12:31 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      I cannot understand why PWE isn't getting more "LUV". BTE, by the way, has much more Heavy Oil, not the Sweet Light Crude everybody has.

      They did, however, do the magic thing. They raised the divi. PWE and AAV bought other trust when OIL/NG was on the skids and have yet to get the credit. Oil/NG could go back to $80/$7 and PWE could still make the divi payments.

      Like I said, if energy stays the same, in 2009 when the hedges fall off, PWE could double the dividend and still have an extra $150 million to pay down debt.

      Yeah, i've been layering a short position of USO for now. Still think NG has more upside and I will probably short that if NG get's above $13.50.

      I don't believe we are getting any credit for PWE future earnings. They are massive. Now, if we could only get them to release the financial statements for Q1 2008. My numbers were off by around 5% and I want to know what I messed up.       May 09 08:14 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      No, not on the stuff in her 401k/Roth/IRA. I don't know, is there a tax guy out there who's figured out to get the credit when you draw the money out. Well, the Roth stuff has already been taxed and it won't get taxed on the way out. The Credit wouldn't do that any good. May 09 04:41 PM
    • Penn West Energy Trust: An Underappreciated Gem [view article]
      Sue, you get smoked on the Canadian 15% tax that they take out for all divi's issued to foreigners. So, back the yield down 15%. However, it's still higher than PBT yield. Also, with energy prices at these levels it's safe to say that PWE will be increasing the divi.

      I own AAV as well.       May 09 04:23 PM
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