Reality comes knocking on Flaherty's door...nobody's home

Well it was only a matter of time before reality came knocking on Flaherty's Door...problem is nobody's home. Knock as hard as you might, still no answer. Not surprising as the lights aren’t on. Ring the door bell and all you hear is “Its not my fault”.

Let’s be honest, our Finance Minister demonstrated that he has the creativity of a gnat in dealing with the income trust file. About the same ethical foundations as well. Well I am sorry to say that the capital markets have a slightly more formidable level of creativity when a situation is created that is so ripe for the picking and so easily exploited for their financial benefit. Much like the relentless flow of water downstream. Or is it upstream where the real opportunities lie? Remember that non-existent MLP market that Flaherty was trying to hoodwink us about back in November? You know, the $480 billion non-existent growing and vibrant MLP market that has a penchant for all things “energy”. The one that Herold Energy Investment Outlook wrote about on February 5, 2007 in their publication under the headline Canadian Trusts’ Loss is US MLP’s Gain? Well here it is. As if it weren’t big enough to start with, now the MLP market is even getting bigger with the launch of a new energy buyout fund that will look to acquire “long-lived, low-decline oil and gas assets.” Worth noting that the press release makes mention of Canada. Do you think there are any acquisition candidates for this MLP in Canada? Do you think there are any “ opportunities to substantially increase the valuation of Pioneer’s proved reserves due to the valuation differences” to be found in Canada?

That’s why I was knocking on Flaherty’s door......still no answers....the lights are out.

Maybe Flaherty is out of town helping Pioneer with its roadshow to market this new offering.

He always wanted a job on Wall Street like certain of his admired colleagues in Finance.


Pioneer Plans to Form Two Master Limited Partnerships

DALLAS--(BUSINESS WIRE)--Pioneer Natural Resources Company (NYSE:PXD) today announced that its board of directors has approved a plan to form two new publicly-traded master limited partnerships (MLPs) which will own interests in long-lived, low-decline oil and gas assets.

It is anticipated that the first MLP to be formed will initially acquire an interest in a portion of Pioneer’s long-lived proved developed oil, gas and natural gas liquids reserves in the Spraberry field in West Texas. Pioneer expects to file with the U.S. Securities and Exchange Commission (SEC) a registration statement for the initial public offering of units of this MLP during the third quarter of 2007 and that the offering will be made during the fourth quarter of 2007. Approximately $250 million of these partnership units are expected to be offered to the public, subject to market conditions.

It is anticipated that a second MLP will initially acquire an interest in a portion of Pioneer’s long-lived proved developed gas reserves in the Raton Basin field in southern Colorado. Approximately $250 million of these partnership units are expected to be offered to the public during 2008, subject to market conditions.

At the close of the initial public offerings, Pioneer will be the general partner of each of the MLPs and hold a majority ownership in the units of each of the MLPs. Pioneer will continue to operate and own a partial working interest in the assets that will form the MLPs.

The purpose of the MLP offerings is to create vehicles that would: provide Pioneer the opportunity to substantially increase the valuation of Pioneer’s proved reserves due to the valuation differences between MLPs and Pioneer; allow Pioneer to more effectively pursue the acquisition of reserves through joint bidding with the MLPs; and afford Pioneer an opportunity to sell its proved reserves to the MLPs and apply the proceeds (including the proceeds from the initial offerings) to fund low-risk opportunities and share repurchases, while maintaining financial flexibility.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations of offers to buy, or any sales of securities will only be made in accordance with the registration requirements of the Securities Act of 1933 or an exemption therefrom.

Due to limitations imposed by U.S. securities laws, Pioneer will not be holding a conference call to discuss the content of this release.

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States, Canada, South Africa and Tunisia. For more information, visit Pioneer’s website at www.pxd.com.