Kurt Wulff (McDep Associates) submits: Analyzing third quarter results released today, we reaffirm estimated Net Present Value (NPV) of $79 a share for buy-recommended Royal Dutch Shell (RDS.A). On that basis, unlevered appreciation potential is 22% to a McDep Ratio of 1.0 where stock price would equal NPV. After the second quarter low point, the latest quarter looks like the start of a rising trend in unlevered cash flow. Unlevered cash flow (Ebitda) for the latest quarter came within 3% of our estimate from three months ago, which is as close as we could expect to see. However, the allocation between upstream and downstream has changed materially with integrated gas now reported as part of upstream instead of downstream. Integrated gas includes the production, liquefaction, transportation and marketing of liquefied natural gas (LNG), a major growth area. As testimony to that, Shell advanced production of LNG in the Russian Far East in the latest quarter. Without integrated gas, downstream’s contribution to NPV falls to 22% from 32% in our valuation that capitalizes cash flow at multiples (PV/Ebitda) related to reserve life (Adjusted R/P) for natural gas and oil. Complete Story »

  Kurt Wulff (McDep Associates) submits: Analyzing third quarter results released today, we reaffirm estimated Net Present Value (NPV) of $89 a share for buy-recommended ExxonMobil (XOM). On that basis, unlevered appreciation potential is 19% to a McDep Ratio of 1.0 where stock price would equal NPV. The prospects for stock market gain by our measure appear higher in absolute and relative terms than we have been accustomed to seeing for XOM over the decades. Attempting to reconcile underperformance in the stock market this year, we might point to overseas natural gas and downstream showing less resilience to decline than in the past. Yet, overseas natural gas may be theindustry’s best long-term growth business and downstream volatility is shared by all companies. Complete Story »

  ChinaBio Today submits: In reporting that it has closed its acquisition of BioDuro, PPD, Inc. (NSDQ: PPDI) announced the acquisition cost - $77 million. The price was not previously released, nor has PPD disclosed the annual revenues of privately held BioDuro.PPD did say that, post-acquisition, it has nearly 1,000 employees in China. Of these, almost 660 came from BioDuro. The company now claims to be the largest CRO in China that offers both clinical development and discovery services.Complete Story »

  Tom Lindmark submits:The next time you hear a politician talk about the number of jobs saved or created by the stimulus package or listen to a commentator on CNBC talking about the improving labor market hark back to this story. It’s from the WSJ and it’s the unfortunate reality that isn’t and maybe can’t be addressed. The story talks about a few Americans that have seen their world turned upside down by the recession. Here is one family’s experience:Complete Story »

  ChinaBio Today submits: In a continuing attempt to cut costs, the Anglo-Swedish big pharma AstraZeneca (NYSE: AZN) said it would move all of its API production offshore, with most of it going to China. The company will close a plant in the UK that manufactures APIs for cholesterol and schizophrenia drugs. Presumably, the company’s new facility in Wuxi will step in to replace at least some of the lost API production.AstraZeneca has been trying to walk a delicate public relations line for the last few years. On the one hand, it needs to build up its Asian operation to cut costs. It also wants to avoid the public outcry that inevitably follows a company announcement that jobs are being eliminated in the UK and created in China. To make matters worse, two years ago, China was involved in a number of embarrassing drug quality scandals, which rendered the decision to move production there even more politically awkward for AstraZeneca.Complete Story »

  Tom Lindmark submits: Many thanks to Dubai for providing fodder to the blogosphere over a slow weekend. Much has been written (too much?) about what seems to me at least to be a minor story.Complete Story »

  Yesterday, China's Economic Information Daily published remarks by a senior Chinese official indicating that Dubai's debt crisis could be a good opportunity for China to purchase gold and oil assets. Ji Xiaonan (Chairman of the Supervisory Committee overseeing large state-owned enterprises) was quoted as saying that the Dubai debt crisis "could give China an opportunity to put some of its foreign exchange reserves into gold or oil." China is relatively well insulated from the Dubai crisis, as there are no reports of Chinese banks with debt exposure to Dubai. And while there are a few Chinese real estate and construction firms with limited exposure to projects in the Emirates, nothing seems to be grave. Yet Dubai's issues portend the perception of a looming dollar crisis in the West.Complete Story »

  Tom Lindmark submits:Yves Smith has taken up the battle to prevent the reappointment of Ben Bernanke as Fed chairman. While I agree in principal with her cause, I do think her rationale for denying him the post misses the mark. When CEOs preside over disasters, they are fired. Captains go down with their ships.Complete Story »

  Zacks.com submits: In its weekly release on Friday, Baker Hughes Inc. (BHI) reported another rise in the number of rigs searching for oil and gas in the U.S., reflecting ramped up activity by the producers in response to higher prices amid recent optimism about economic recovery.Rigs exploring and producing in the U.S. climbed to 1,137 for the week ended Nov. 25 (as clear from the first chart below from Baker Hughes). This is the highest in eight months and is up by 24 from the previous week’s tally. The current nationwide rig count is 30% higher from the 2009 low of 876 (set in the week ended June 12).Complete Story »

  Brandon Matthews submits: By Brandon Matthews In an interview with Sirius XM (SIRI) CEO Mel Karmazin following the Reuters Media Summit held Monday in New York, Karmazin outlined his case for new listing requirements that would exempt Sirius XM from minimum share price requirements under NASDAQ rules. Mel Karmazin made it clear that the company has until at least March 15, 2010 and will execute a reverse split only for the purpose of remaining listed on the NASDAQ.Complete Story »

  Donald Marron submits:Yesterday, the Congressional Budget Office released its much-anticipated analysis of how the Senate health bill might affect insurance premiums. As a political matter, the analysis appears to be a clear win for proponents of the bill. Most importantly, CBO found that average premiums in the large group market—which provides about 70% of private health insurance—would decline slightly in 2016. That provides comfort to Senate moderates who were concerned by claims that the bill would increase premiums significantly. On the other hand, the report also found that average premiums in the nongroup market would increase by 10 to 13%. That substantial boost is providing some ammunition to opponents of the bill.Complete Story »

  Zacks.com submits: In its weekly release last Friday, Baker Hughes Inc. (BHI) reported another rise in the number of rigs searching for oil and gas in the U.S., reflecting ramped up activity by the producers in response to higher prices amid recent optimism about economic recovery.Rigs exploring and producing in the U.S. climbed to 1,137 for the week ended Nov. 25 (as clear from the first chart below from Baker Hughes). This is the highest in eight months and is up by 24 from the previous week’s tally. The current nationwide rig count is 30% higher from the 2009 low of 876 (set in the week ended June 12).Complete Story »

  The Reserve bank of Australia (RBA) increased rates by 0.25% for the third consecutive month to 3,75%. While the decision did not come as surprise (it was forecasted by 19 of 20 economists surveyed by Bloomberg News), it was far from sure and was criticized by the Australian Industry Group Chief Executive Heather Ridout, who said in a Bloomberg interview that policy makers “could have afforded to take a pause until the New Year when the business outlook is clearer.” In the Governor Steven’s statement released at the end of the meeting were underlined the reasons behind the rate hike. As regards economic outlook, Steven said that, “Prospects for ongoing expansion of private demand, including business investment, have been strengthening. There have been some early signs of an improvement in labor market conditions. The rate of unemployment is now likely to peak at a considerably lower level than earlier expected.” As regards inflation, Steven said that, “inflation should continue to moderate in the near term, though it will probably not fall as far as thought likely six months ago.” Steven also indicated that the rise in exchange rate during this year will have the effect to dampen both in inflation and growth (via external sector) in the medium term. Complete Story »

  Zacks.com submits: Last week, the federal government’s Energy Information Administration [EIA] reported a lower-than-expected rise in natural gas supplies. Stockpiles held in underground storage in the lower 48 states rose by 2 billion cubic feet [Bcf] for the week ended November 20. This takes the current storage level to a new all-time high of 3.84 trillion cubic feet [Tcf], which is up 11.8% from last year's level and 13.0% above the five-year range (as clear on the chart from the EIA). Current stocks are 404 Bcf above last year’s level and 442 Bcf above the five-year average.Complete Story »