Bellatrix Exploration Ltd (Canada) BXEFF

RE:RE:RE:Good Read S Alpha

[dinkdestroyer]

Alberta NG production has one disadvantage that really hurts valuations and that is why I remain in most of my NG investments but trade in and out of BXE(for now anyway). TtansCanada just came out offering short term firm transportation of NG from Alberta to various Eastern Canada delivery points for $3.12MMBtu(plus fuel charge $.10). With this kind of predatory transpotation, most producers are unable to bite but it illustrates the lack of transportation options available to Western Canadian producers and why they suffer lower valuations. Much the same thing affects the Marcellus/Utica producers but at least the situation is steadily improving for them with all the new pipes coming on line in that basin. The producers in Westeren Canada suffer from remoteness and lack of capacity to reach markets and the only way they can counter this is to drive down costs, Yes BXE will replace the production but the problem is it is gas replacing oil and they will have to keep working on their cost structure despite the higher gas prices. I like the company, but I am concerned about the headwinds.