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UTS Energy (UTS.TO)

COMMENT
Currently sells for equivalent of cash in the bank. Won't know until December the decision on the Fort Hills project, but it's a pretty good bet they will postpone the upgrader. Currently have enough cash to last into 2010. Also have 2 other properties with Teck Cominco (TCK.B-T) that will be developed. Sold his holdings for tax loss purposes. Interesting speculation and first-class management.
DON'T BUY
Recently had issues with their ability to finance their current project. Way too risky at this point.
DON'T BUY
(Market Call Minute.) Have to stand back from this one until the whole oil sands cost factor gets sorted out.
DON'T BUY
Big risk on this is that they are not in the driver's seat on the Fort Hills project. Also no clarity on the project and no decision will not be made until December. Stock will be in limbo until then. Decision will probably involve some lengthening out of the time frame.
DON'T BUY
Some analysts are optimistic on this and expecting a take-out deal. He is not as optimistic as Petro Canada (PCA-T) does not need to acquire them. If you want a Fort Hills project, buy Petro Canada instead. He is not a fan of either company.
RISKY
Share price is equivalent to their cash in the bank. Questions regarding Fort Hills project. If it went ahead, he feels they could raise the cash.
N/A
They don’t have the capital for the new higher price of the Fort Hills project. It’s cheap but you have that risk. It’s trading at a significant discount to net asset value.
DON'T BUY
Fairly early along in the oil sands. Partners Petro Canada (PCA-T) and Teck Cominco (TCK.B-T) are seeing substantial price increases to bring heavy oil on. Feels they should have sold off more of the asset base and refocused the company. Company of this size is going to have a great deal of difficulty raising the cash.
HOLD
Correction in the price of oil has hurt all of these companies, especially the companies that are not in production. Costs have been skyrocketing. Feels this is a warrant for higher oil prices. If you own, wait for the price of oil to go up before selling.
SELL
Involved with Teck Cominco (TCK.B-T) and Petro-Canada (PCA-T) in the Fort Hills project and the costs have taken off tremendously, as it has in much of the oil sands. Until they get into production, who knows where the costs are going to end up.
COMMENT
Announced their project is going to be considerably more expensive than they thought. Dirt-cheap. Trading at about $.20 per barrel of reserve in the ground. Market is currently punishing anything without production visibility and this one is 3 or 4 years away.
SELL
(Market Call Minute.) Massive cost overruns. Need to come up with $3.5 billion for the Fort Hills project.
BUY
The big question on this is that they have to raise $1 billion. With the credit crunch, the market is concerned they will not be able to raise it. She thinks they will be able to raise it. Have a lot of projects that they can farm down.
COMMENT
One of the upcoming new targets in the tar sands in partnership with Petro-Can (PCA-T) and Teck Cominco (TCK.B-T). Have a very large land position, which will be going into production in about 2011. High fixed capital costs (steel, labour, etc) and low variable costs so when oil drops the stock does too. If oil gets back to $140 this will probably get to $6.
HOLD
This stock will be taken out but the question is when. The big issue is how to get a handle on the cost side. Decent name that is worth holding.
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