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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Think4Yourself who wrote (55937)	12/3/1999 10:04:00 AM
From: SliderOnTheBlack	Read Replies (2) of 95453

JQP re: NBL - there is more than the surface story here ... NBL price to sales ratio is because they chose to invest in infrastructure assets vs. spending cap ex $ in a terrible commodity price enviornment. They protected their capital structure & balance sheet - the kept the Gas in the ground where it proved to be worth more - than if they would have pumped & sold it. The Street simply can't justify very easily this type of "Bet" that NBL made on Nat Gas Prices. Unfortunately, BR & NBL are the Nat Gas commodity proxy's for many, many institutional investors who do not specialize in energy. They buy these 2 as a proxy on Nat Gas prices. NBL made a very, very savy mgmt decision imho. There is some degree of risk with their gas plants, the Calif offshroe lease situation is very minor & has been addressed. This was a non-event in NBL's decline - the bulk of which had allready occured. The real story is that NBL is "Still" a proxy for Nat Gas, that Nat Gas is oversold here, that NBL unlike nearly any other company; is hugely leveraged to dramatic upside production, cash flow and earnings in year 2000 and "if" - or, imho - "WHEN" their infrastructure bet plays off - this will be one of, if not allmost assuredly; the biggest % gainer among Energy large caps in year 2000. I see virtually - ZERO RISK here in NBL near a damn 5 year low here ! a 5 year low with $2.30 Nat Gas in EARLY DECEMBER ?!?!?!? - are you kidding me ? - with that cap ex plan going forward ? There is some risk of course with a nat gas pureplay; but - also cooresponding upside leverage. This is "THE" play on Natural Gas imho. I do prefer the balanced Crude to Gas plays however for the overweighting of my portfolio however. UPR OEI PXD are my 3 fav's there. VPI is a great - unhedged play on Crude here. NEV while poorly hedged another - way oversold... We shall see - as pointed out, there is some huge upside to those NBL calls for the risk oriented; legitimate 6-8-10 bagger plays potentially.

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