R.Biese

Canadian Oil Sands: Why a Larger Syncrude Holding Makes Sense

This is a world class asset so use international valuations.
News says XOM is paying $4 billion for 25% stake in Ghana Jubilee field. One estimate of it's peak production rate is 120 kb/d (but unsure on this number). So fresh, produce-able, international reserves valued at $133,000 /(peak kb/d). Giving a 50% premium for 'peak/average' this comes in at $200,000 /(flat kb/d)
The article's $3 billion price tag for 9% of Syncrude at 289 kb/d (2008 avg) is $115,000/(flat kb/d) with ?40? yr reserve life. A proven, producing asset. Permitted, built, hooked up & flowing. Making money at US$40/bbl.
Q: Why is there so much of a disconnect between international valuations and Cdn oil sand valuations for producing assets?
Q: Has Bay/Wall Street convinced Calgary/Houston to part with their assets at half price... again?
Q: Was March/09 a '10 cents on the dollar' fire sale of the next decade? A "buy Microsoft in 1994" moment? (I suspect 15 years from now the answer will be "Yes"... with a comparable chart.)
<start personal rant>
IMHO, new pipes to the West coast for both sco & ng should be built to get international pricing & international valuations on assets.
There is an urgent need for some new kahonas to be grown in Ottawa & Edmonton to withstand the Bay/Wall Street pressure/clutter/noise. Canada has ~10% of global proven oil reserves just in the oil sands. Act like owners not custodians of an international 'gift to the world'.
Only a fool would 'think so small'.
<end personal rant>

Impact of Commodity ETFs on Prices: An Update

You are bang on to relate ETF holdings to price trends. e.g. The 17 'qualified' purchasers of GLD units now have strategic and tactical control of (at least the timing of) the purchase & sale of 500-700 tonnes of gold. This is about the 5th?-7th? largest stockpile of gold on the planet, including central banks. No 2004 CB Gold Agreement agreements here. No legislative approval for purchase/sale.
The possibilities for futures/options/OTC derrivatives vs physical arbitrage vs ETF holdings are staggering. Whipsaws in price are extremely profitable when you know they are coming. Anyone watching COT's, Comex and CB activity must now look at ETFs in a whole new light. (Don't forget to look at volume changes of different ETF's on the same commodity such as GLD vs smaller ones like CEF, etc at volume break points before this indicator 'disappears'.)
Thar's a new sherrif'n town. He'd be call'd ETF. An' he'd be a wild'un.