Energy & Industrials News by GLG Council Members

The staff of Offshore Magazine in Houston reported on December 1 that Callon Petroleum Company will suspend operations in the Entrada field located in Garden Banks 782 block in the deep water of the Gulf of Mexico. Higher costs and lower crude oil prices have caused a serious decline in the project’s economics. Fred Callon, chairman and CEO, said the current difficult financial climate poses a challenge...

Although the idea is interesting it suffers from two potential fatal flaws: 1. The power density is quite low.  The article provides an example of a 1.0 km by 1.5 km farm  producing enough electricity to power 1,000 homes; and 2. The design reveals a lack of understanding the magnitude of the forces encountered in waves and ocean currents. Undershot turbines suspended from platforms similar...

They had to say No - what else could they say? Anything positive would be to admit that they have not been running the airline well.  The truth is that Aer Lingus is now in a worse situation than they were last time Ryanair came knocking.  Even Ryanair has been battered by the oil shock and falling demand. But Ryanair has much deeper pockets.

  The Teamsters union hierarchy has reached a tentative deal on wage concessions covering some 40,000 union members at YRC units Yellow Transportation, Roadway, USF Holland and New Penn.   The exact amount of the wage give-backs is not known yet. It is expected to be in the 10 to 15 percent range. A 10 percent give-back would mean about $200 million in annual earnings before interest and...

    Lufthansa's decision to include the Italian Skies is a natural next step in establishing themselves as the largest European airline.  Unlike the american airlines, Lufthansa is one of the world's most profitable airlines and their plans to expand come should provide a basis to compete longer term with Alitalia.            Having...

  The seized-up credit markets have basically stalled the market for new Class 8 heavy trucks in this country. New Class 8 sales are projected to reach just over 111,000 this year, compared with a record sales year of 265,000 just two years ago.   Nearly every significant heavy truck fleet in the nation is either scaling back or eliminating capital expenditures for 2008 and 2009.  ...

To North American tax payers, the question should not be whether a bailout-handout to the auto industry will get them out of trouble since this exercise has already proven to be fatal error in Britain of 70s. The question should be why the auto industry is refusing to do the right thing by declaring bankruptcy.  

The analysis of our colleagues gives us a good look at the expense side of the YRC segment, but how about the freight demand versus availability capacity side? This raises the real question of “what the right amount of capacity” for the foreseeable future? Then who is better able to address it?

Jad Mouawad in New York reported in the November 28 issue of the International Herald Tribune that for the first time in a decade, OPEC members face a test of their unity. Falling crude oil prices, reduced demand and declining revenue are on their collective minds. Although these three distressing factors united them in spirit, in reality, two competing factions exist in the group. Moderate members...

The BHP/Rio deal was always a long shot. Antitrust issues were formidable and the success of the deal was always going to be hugely dependant of regulator demanded asset sales requirements. Given the collapse in asset values in the last three months, any value for synergies would have been overwhelmed by the prospect of low realizations on assets sales over the next two years. Other factors were...