Painted Pony Pete Ltd PDPYF

RE:Buying 1/2 positions on PPY and TOU

[fergus2]

I can’t disagree with you Indicator. PPY has been in a long downward spiral and the announcement yesterday may prove the shock value for a nice overshoot. I doubt it goes much below $6.00 and it’s entirely possible we’ve seen the low put in today. I don’t hold PPY shares (due to a one sided position in Birchcliff) but do see value at these levels. PPY might be a little light on the liquids side but much depends on the oil price and how the rigs deploy (NG versus oil) in the lower 48 over the next few months. If oil stages a comeback to the $80+ range it’s the associated NG that will hurt the gassy plays. Conversely, if the oil price languishes this could set up quite nicely.  A lot of the shale plays are uneconomic for NG at current prices (Barnet & Haynesville) so gas rigs will likely not respond until the NG price improves substantially. A bounce up to $4.00 would probably be reflected in the AECO futures strip providing some nice hedging opportunities to keep the run alive. Oh yes, and then comes winter.
So I wonder how much of yesterday’s announcement has already been priced in??? Certainly some and maybe all.