E50

Our challenge is to build a portfolio of 50 energy majors from diverse sectors and regions in order to synthetically construct the optimal energy company. Rather than an academic exercise, we are putting our own money behind the E50 basket and using the research to give us a global strategic view of energy.

Cameco and the supply of yellow cake (part 2: Who has HEU?)

Previously I vowed to dig into the strategic stockpiles of highly enriched uranium (HEU), a secondary source of the U235 isotope that competes with uranium miners such as Cameco.  HEU can be down-blended into LEU by mixing with un-enriched uranium and processed into fuel rods.  In a future post I will discuss a third-source of nuclear fuel: recycling.

Continue reading Cameco and the supply of yellow cake (part 2: Who has HEU?)

Cameco and the supply of Yellow Cake

yellowcakeSome days ago I opened length in Cameco (CCJ), the Canadian uranium processor, with an initial belief that they could sustain their dividends and ride out the trough in U3O8 prices.  Uranium spot prices (as quoted by Ux Consulting) have fallen from $70 per pound in 2011 (pre-Fukushima disaster) to $19 per pound recently.  Cameco doesn’t deliver at these low spot prices but holds utility customers to long-term (and more expensive) supply contracts.  However, these customers would understandably like to renegotiate the level for the duration of their existing deals or threaten to find a new supplier when it is time to renew.  In other words, the plunging spot price does effect revenue.  Continue reading Cameco and the supply of Yellow Cake

OPEC meeting – wrap-up and thoughts

In an historic day for the oil market, the OPEC members met in Vienna in a closed door session and reached an agreement on 1.2 Mbpd of production cuts.  Combined with a non-OPEC pledge to cut 600kbpd (including 300 kbpd from Russia), we will begin to see inventories slowly diminish.

Yet the language leading up to today was pessimistic.  The Saudi energy minister Continue reading OPEC meeting – wrap-up and thoughts

The E50 Fund – intro

Our challenge is to synthetically construct the best global energy company by constructing a long/short portfolio of 50 listed energy majors that represent a diverse mix of sectors and regions.  We include European utilities, Japanese gas traders, global oil service providers, Chinese coal producers, and many more.