CALPINE, MIRANT AND EL PASO GAIN GROUND

CBS Market Watch ^ | 07 April 2003 | Lisa Sanders

[MeneMeneTekelUpharsin]

NEW YORK (CBS.MW) -- Shares of Mirant and Calpine gained Monday as investors expressed optimism the two would soon announce refinancing deals. El Paso advanced as the company announced a slate of directors for its board. Last week, Reliant Resources (RRI: news, chart, profile), Dynegy (DYN: news, chart, profile) and AES Corp. (AES: news, chart, profile) completed deals considered critical to the survival of each.

Reliant, which announced a new $6.2 billion financing package Tuesday, declined 2 cents to $4.31 in Monday midday trading. See related story. The stock is up more than 17 percent in the last week. Dynegy added 6 cents to $2.75 in recent action. The company announced a $1.66 billion financing through subsidiary Dynegy Holdings Wednesday. And AES Corp. said Friday it plans to launch a refinancing that would include a private offering of $1 billion in new senior secured notes. See full story. Shares rose 15 cents to $4.85 on volume of 3.7 million in recent Monday action. The daily average is 2.54 million.

Given the refinancing news in the last couple of weeks, bankruptcy risk for the energy merchants is "not as high as people have speculated," said Lasan Johong, an analyst at Blaylock and Partners. See Due Diligence for more. Shares of Mirant (MIR: news, chart, profile) rose 9 cents to $2.01 and Calpine (CPN: news, chart, profile ) added 12 cents to $4.28. Both companies have declined to comment on ongoing negotiations related to debt refinancing. Calpine was the most actively traded energy stock Monday with volume of more than 6 million. On Monday, Mirant said the Public Utilities Commission of Nevada had approved three long- term power contracts signed by Mirant and Nevada Power Company in January. Under the contracts, which extend to April 2008, Mirant will provide 325 megawatts of capacity and electricity to Nevada Power Company.

Also Monday, El Paso Corp. (EP: news, chart, profile ), which has been accused by dissident shareholder Selim Zilkha of having a board lacking in oil and gas industry experience, announced the slate of directors to be voted on at the company's annual meeting. A date for the meeting has yet to be set. El Paso said it had elected to the board James Dunlap, a former vice chairman, president and chief operating officer of Ocean Energy/United Meridian Corp. and former president of Texaco. Other board nominees include Robert Goldman, formerly the chief financial officer of Conoco, Michael Talbert, chairman of Transocean (RIG: news, chart, profile), and John Whitmire, chairman of Consol Energy (CNX: news, chart, profile). See more. Shares of El Paso were up 33 cents, or 5.4 percent, to trade at $6.49 on volume of 5.6 million.

Elsewhere, Anadarko Petroleum Corp. (APC: news, chart, profile ) declined 52 cents to $44.88. The Houston-based company announced it had discovered natural gas at its Jubilee prospect in the Eastern Gulf of Mexico. Atwater Valley 349 No. 1 is the first well drilled under the exploration program in the Eastern Gulf. The Amex Natural Gas Index (XNG: news, chart, profile) rose 1 percent to 171.48, lifted by Williams Cos. (WMB: news, chart, profile). Shares rose 18 cents, or 3.7 percent, to $5.08 to help offset losses in Anadarko, Apache Corp. (APA: news, chart, profile), and EOG Resources (EOG: news, chart, profile). On the New York Mercantile Exchange, May natural gas gained 19.2 cents to $5.135 per million British thermal units on forecasts of colder weather. Crude for May delivery shed 46 cents to $28.16. See Futures Movers.

[MeneMeneTekelUpharsin]

Too funny. A lot of people have been running down energy stocks for a LONG time. When are YOU going to turn off your lights, refridgerator, stove, AC and heat? LOL. Electricity is an essential. As long as companies aren't doing the Enron thing, they remain viable. Some probably trashed these companies WHILE buying their stock. Well...they're coming back now, aren't they?

[BOBTHENAILER]

Been havin' a lot of fun trading most of those over the last year or so.

[Ernest_at_the_Beach]

But they owe Gray Davis money! /sarcasm

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[snopercod]

Sounds like more pump-'n-dump to me, sorry.

Wall Street was recommending DUK at 22 as a strong buy. Where is it now, eh?

[MeneMeneTekelUpharsin]

That is a categorically inappropriate comment. Electricity is a necessity. To classify ALL IPPs under the Enron umbrella is wrong. Period.

[MeneMeneTekelUpharsin]

And, some dropped a bit yesterday anyway. However, long-term, companies producing necessities are going to recover. If you feel that strongly about it, short sell them. Please.

[MeneMeneTekelUpharsin]

Sounds like more pump-'n-dump to me, sorry.

Check where this stock was when you posted the ugly comment above. Then, check where it finished today. How is that a pump and dump? Please don't make reckless comments about me when you know nothing about me. Everyone should do his or her own due diligence. Anything posted here is ONLY my opinion.

[MeneMeneTekelUpharsin]

Been havin' a lot of fun trading most of those over the last year or so.

Trading these can be fun AND dangerous. However, it looks like some in the energy sector are starting to recover. They cut costs and took careful steps to remain viable. It should begin to help these companies become viable businesses in my opinion. Not all were "Enron" type businesses.

[snopercod]

DUK is back up to about half of what it was when Wall Street was pumping it.

My "ugly" comment was aimed at Wall Street, not you.

[BOBTHENAILER]

However, it looks like some in the energy sector are starting to recover. They cut costs and took careful steps to remain viable. It should begin to help these companies become viable businesses in my opinion. Not all were "Enron" type businesses.

Agreed.

[MeneMeneTekelUpharsin]

No problem and clearly understood. I share your sentiments regarding the higher ups on Wall street.

[MeneMeneTekelUpharsin]

Calpine, Mirant and El Paso will probably drop. Let's see if I'm right.

[BOBTHENAILER]

I've got Calpine and EP right now. What do you see that will bring the drop?

[MeneMeneTekelUpharsin]

I've got Calpine and EP right now. What do you see that will bring the drop?

Because you own them...LOL. Isn't that the way it works? If you don't own them, they go up. If you do, they go down. Simple logic. I finally sold out of Calpine. Probably a mistake...but put it somewhere else.

[BOBTHENAILER]

Because you own them...LOL. Isn't that the way it works? If you don't own them, they go up. If you do, they go down. Simple logic.

ROFLMAO.....Very true (sadly) for a period of about 3 years. Got a portion back however by periodic trading of EP, WMB, Calpine, ILA and a couple others.

How that happened is a miracle given my past failures.

[BOBTHENAILER]

Just checked CPN....up $.31, now watch, it'll plummet after I post this. LOL

[BOBTHENAILER]

#16 was supposed to go to you.

[MeneMeneTekelUpharsin]

Interesting market to say the least. Let me show you something. The following power producers year lows and current prices are posted below:

AES 0.92 6.89
CPN 1.55 5.18
RRI 0.99 5.72
MIR 1.06 3.15
NOR 1.41 2.44
CMS 3.41 6.19
WMB 0.78 7.06

Interesting.

[BOBTHENAILER]

Yeah, the Enron and California lawsuit fallout just hammered some good companies. I bought WMB at .90 and later sold at 2.75, Bought again around 3 and sold at 4.5. Bought Calpine at 1.75 and still have it. Traded RRI for some profit and have made and lost money on EP which I still own and at a profit, including the losses. This has been an adrenaline rush. Scary and fun at the same time.

[MeneMeneTekelUpharsin]

Wow. You did well. I believe several of these energy producers are going to be viable. Electricity is a necessity in our society. They're making it and making a profit doing it. Both Calpine and Mirant had losses in the last quarter, but I believe they are one-time charges for equipment writeoffs (scaleback of construction) or other things like that which are not recurring.

It should make for interesting observation in the coming days. Seems like more Freepers should be awakened to joys of investing for the long term at times like these.