Sunday, November 09, 2008

BNET Update: Monday, November 10, 2008

As lower natural gas prices and tight credit cause some natural gas companies to cut back on drilling activity in the costly Appalachian Basin, Carrizo Oil & Gas (CRZO-$23.05) announced a joint venture with Avista Capital Partners to pursue growth opportunities in the Marcellus Shale. Terms of the deal, however, initially favor the private equity firm.

To offset weaker construction spending in the United States, Europe, and Japan, Caterpillar (CAT-$38.45), the global leader of construction and mining equipment, is
making it easier for customers in developing countries to access credit.

In the current environment of lower natural gas prices, especially in the Mid-Continent and Permian Basin, Cimarex Energy (XEC-$$33.67)
expects to drop its operating rig count from the third-quarter high at 42 to somewhere between 25 and 30 rigs by the middle of the fourth-quarter ended December 31. As the company has historically increased production through the drill bit, one would expect downward revisions to add-ons in 2009 production and proved reserves to follow.

Turmoil in the financial markets has temporarily limited credit reporter Equifax’s (EFX-$25.32)
ability to finance new initiatives via the credit markets

Albeit Exxon Mobil (XOM-$73.95) reduced GreenHouse Gas emissions by about 5 million metric tons in 2007 — equivalent to removing about one million cars from roads in the United States — it is clear from a read of the company’s third-quarter 2008 earnings report that policy options seriously being pursued by the company
do not include a commitment to developing renewable fuel alternatives.

In its most recent quarterly filing, Manpower, Inc (MAN-$29.50) detailed a write-down of $140.8 million in goodwill and $22.3 million in intangible assets, signaling another
asset bubble bursting in this global slowdown – that of employment service providers.

Mobile phone maker Motorola (MOT-S4.79), still stumbling from its failure to design smartphones to compete against the likes of Apple’s iPhone and Blackberry models from Research in Motion, now has a new misstep to deal with –
poor returns on its in-house Fund, SigmaFund.

Based on the current annualized distribution rate of $1.20 a share, Provident Energy Trust (PVX-$6.10)
offers an attractive dividend yield of approximately 20 percent. In addition, much of the income being generated from the company’s oil and gas properties would be effectively sheltered from the proposed legislation by the Canadian government, Budget Implementation Act (Bill C-52), until 2016.

SunPower (SPWRA-$33.86) filed its third-quarter 10-Q with the Securities and Exchange Commission late Friday. In addition to new foreign exchange currency issues, a read of the report suggests the solar cell maker could face
a cash shortage in coming quarters, too.
These first appeared in either BNET Energy or BNET Insight: 10-Q Detective.

Editor David J Phillips and Columnist Debra Fiakas do not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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