Company info: it is the 6th largest intergated oil company in Canada, with 61% oil (30% in eastern oil; 18% in international oil project; 13% in oil sand), 19% gas and 20% downstream (refinery & retail). It was incorporated as a crown corp back in 1975, privatization began in 1991 and the government of Canada sold its last shares in 2004.

Financial ratio: reveune growth 12.5%, P/E 10.3, forward P/E 9.5, return on equity 17.5%, proved reserve & add'l as of Dec 31, 06 is 1,442 MMboe with a life index of 17.3 years.

Sector info: God is kind to Canada because it holds the world's 2nd largest oil reserve. Warren Buffet said he is also interesting in Canada's oil sand business last week. Due to speculate trading, Oil price rise to US$90 per bbl and CA$ rise above US$ (due to weak US economy and US interest rate drop). According to its 07 2Q report's esitmation, every US$1 oil/bbl increase, will increase its EPS by 8 cents, every $0.01 increase in CA$ to US$, will increase its EPS by 3 cents.

Outlook:  PCA is constructing refinery plant in  Edmonton & Montreal , expect to generate reverune start from 4Q08 and 09. After that, the refinery production will increase from 26k b/d to 48k b/d.

Risk: Government is thinking to increase royality tax which will affect PCA's profit. I think the reasonable oil price should be in a range of US$70 to US$75 in long run, and if Republic fall in the next election, price may drop further. It will also affect PCA's reveune too.

Conclusion: my target price is $70.5 and current price $52.

Any conflict of interest? Yes, I hold PCA's shares.