Sunday, January 24, 2010

earnings and storage

Fourth quarter earnings were announced on Friday. Interesting as always, though I have not had the time to really go through the release. I tried listening to the live webcast, but actual work sort of side-tracked some of that goal so I missed most of the second half of the call. While it is not up yet, the recorded call will eventually be posted here as a mp3 file. However, if you simply cannot wait, you can comb through the transcript from Seeking Alpha.

It seemed like there more more questions than normal about natural gas, but that might be biased by the some of them being at the beginning of the Q&A session so I found that interesting. Of course, natty gas (hey, it's like how people call Natural Light beer 'natty light') might be on everyone's minds as US storage levels have changed dramatically in the last two weeks.

Checking out the storage chart, levels are no longer at record levels. In fact, they have now fallen below the 5-year average. This was made possible by the record drawdown over the last two weeks:
The report also marks the first time in EIA’s 16-year history of weekly inventory data that combined net withdrawals from storage over the course of 2 consecutive weeks have exceeded 500 Bcf.

It probably had something, though I just cannot figure out what, to do with the last week's temperature being "3.6 degrees lower than normal".

Getting back to the earnings conference call, I was hoping to hear someone ask about the Venezuelan currency devaluation from a couple weeks ago and I was not disappointed. Obviously, there is no direct Q4 impact, but I thought it might have a significant impact on the business there, but apparently not, since this was the reply:
"Going forward if the official rate will, the devaluation will take place, it will reduce our revenue because of the local currency portion will obviously be less in the corresponding dollars, however it has no impact on the profitability. It is slightly better as a matter of fact."

I found that surprising, but it hinges on an analysis (which I would struggle with at best) of information (such as the splits between dollar- and bolivar-denominated revenues and expenses) that I do not have.


buickguy said...

OK, I listened to the whole 61 minutes. Looks like hydrocarbons will be around for another year, and pretty cheaply, too. Solar will catch on some day.

Anonymous said...

Didn't Chavez practically nationalize all foreign businesses?