KOB.TO - East Lost Hills & GSJB joint venture Message Board

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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture

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To: Bearcatbob who wrote (3830)	8/2/1999 10:04:00 AM
From: Check	Read Replies (3) of 15703

Hi Bob, <<From what I can see the debt in relation to production numbers are similar to ELK and the current production is almost all gas and associated liquids.>> 1st Q (ended March '99)in CDN $ millions Cashflow Working capital + total debt WML 1.425 66.6 ELK 3.323 71.1 Hardly "similar". Since then, WML increased it's production to 3.2 MBOE by the end of April, but then they sold $13.7 MM of producing assets. The sale and the recent equity issue would have reduced their WC deficit and net debt to about $42.6, still much higher in relation to 1st Q CF than ELK. I expect to see much better CF numbers from ELK for the second Q as some 40 % of their production is oil. Their balance sheet should also improve with some minor dispositions and the recent issue of flow -throughs. They also have much greater reserves in place and some 2.2 MM fewer shares out on f/d basis. Given that the two companies have almost identical upside leverage at ELH, on the basis of that alone, there's no doubt in my mind as to which is the better pick. Have a good day.

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