CHI - Channel Infrastructure Ltd (NZR)

[K9]

quote:Originally posted by belgarion

Bought as many as I could when I started the 'energy doom and gloom' thread. Those supplying my borrowing thought that the price of oil would fall, yes FALL, when america invaded Iraq. My yeild now is just beautiful. I like cash. Now I sit.

and what did you say oil would do to the US/Japanese economies and the DOW? Both those economies have been trucking along very well, the DOW is up nearly 45% since that thread. (shakes head and laughs)


The following from Belgarion on said "energy doom and gloom" thread......

"Is nobody doing the maths here? Check out US (and others) falling inventories. Oil companies are hedging that next year they'll be able to stock up at lower prices. Will they? Remember many economies, US and Japan, for example have a direct relationship between growth and the price of oil. Oh and so does the DOW, S&P and oil prices.

BTW Capitalist, like to see your numbers (or even your logic) to support your view that everything will be hunky-dory Oil futures are fairly bullish at present even though the the Iraq issue is likely to be resolved within a 6 month period. Thats an interesting one to explain."



[^]Very interesting indeed.
BTW that is when he also said he would sell down all of his stock holdings, and maybe buy TEL

[R2]

[K9 Quote - Oil companies are hedging that next year they'll be able to stock up at lower prices]

What does that mean ?

Oil companies want the price to stay up cos they own reserves, and are able to extract otherwise uneconomic deposits.

Refineries are dependant on reliability & throughput that is all.

Maximum throughput at maximum margins are all you can hope for and currently that aint bad. They are nothing but a cash cow and I would think the Oil Co's want every drop of dividend out to make up for red ink on their marketing margins - does anyone else see NZR as a great defensive stock to buy even at current prices at this point of the economic cycle ?

[K9]

Don`t ask me, I`m not that dumb

Ask the writer Belgarion...it was his call[xx(]



Compared to Europe, the US and particularily Japan has been doing quite nicely EVEN with high OIL prices.

[duncan macgregor]

The price of oil will only increase in the long term. Short term fluctuations will continue, but long term the price will be sky high. A company finding oil that is uneconomic today will find that tomorrow it becomes a cash cow. The world will run out of oil in the end, with great wars fought over the remaining stocks.
We will produce alternatives, but to counter that we will always have a great demand for remaining resources. The share market will treat the people well that can visualise this. The retailers of oil and refineries will depend on other aspects, it is the companies with oil in the ground that will be the big winners the large refineries will go out of business.

[R2]

Good post DM, if you read it with a deep voice it sounds like the begining of another Peter Jackson triolgy...

Your points strike me as completely logical e.g. oil will run out one day and the price will be unlikely to go down.

The 'great wars' bit sounds useful in terms of trading gold stocks, perhaps we will get to participate in the new economy after all.

Don't agree that the refineries will go bust before the oil runs out cos it needs to be refined and those who own the oil in the ground also own the refineries. My guess is that will be around 2050.

Which brings me back to NZR; given that the current price is based on expected profitability and dividend payment, why is this not a good time to purchase as apposed to say when the stock was $14 and NZR announced that they may have to halt dividends due to capital expenditure requirements (about 18 months ago I think).

No one seems to know, I guess because $30+ sounds like more than you'd pay for 3 large pizzas. Think I'll buy some more, if I didn't think it was a good investment at $30+ then I guess I'd be selling what I do hold, or is that too obvious ?

[craic]

Going up again this morning in spite of all the rubbish posted here. All you have to remember is that NZR is an effective monopoly (2) It is owned more than 70% by its primary customers, the three or four big oil companies, Shell BP etc.,(3) Any extra costs can be immediately applied at the pump and customers must pay or walk (4) If they put the price up a tad too soon or keep it up a tad too long, well, its just a little more profit. All the philosophical arguments about world events, supplies, alternatives and the like are of no consequence to you and me as we will have plenty of time to take cover in the event of disaster but right now just sit back and watch those dollars and cents rolling in.

[R2]

Did a little more research and then bought a few more. Certainly pleased I did now.

My strategy, for what it is worth, is to hold until 12-18 month before the next Olympics, at which point I think demand from China will start to ease.

May hold longer as World refinery capacity needs to increase by 24% to meet predicted 2015 demand.

As it costs 3-4 times as much to build a new one as it does to expand and existing one,many refineries will be undertaking and paying for expansion out of their fat margins,I think a nice little refinery that isn't going to spend capital on expansion or sour crude conversion capability but rather pay dividends sounds good !

Any differing views ?

[craic]

And the magic 4000cps has been reached again.

[Chris]

Well... I have to eat my words... I for one didnt think that we would see prices like this again.

A couple of interesting things to consider though... Green house gas... yes I know that they have an agreement with the Government but are they keeping too it? Are they still striving for best in class energy efficieny and also the deal that the govt gave them mentioned carbon credits for co-gen... looks like that has been shelved...

On the up side... big land holding in the very expensive Marsden port area.

Increased pipe line capacity which I am sure is being sucked up by the Auckland crowd... for those who are interested, have a look at the AIA throughput charts and it will give you some idea as to the growth of the pipeline... it may however be at maximum capacity by 2009... which is good and bad..

Anyway... only a few days left of the half year.. I am going to predict the profit for the 6 months... I was pretty close with the full year so here goes...

Revenue 143m
Costs 62m
EBIT 81m

Int divvy $2.50

Full year profit 150m.. final divvy $3.

Just thoughts... but still a 15% return

[craic]

I can live with that, but, I am more inclined to believe that it will be $2.