re: Gordo - off topic: I looked at LBR briefly, it does look like a decent prospect. I'll have to dig a little deeper to decide how far it can/should/might go. Things to consider include:
(a) 1800 boepd exit for 2000, but what do they expect to average in 2000? (b) Mgmt is unknown. (c) More info wrt reserves (d) Gas isn't as bullish as oil - the forecast is for average prices - they're 60/40 (e) 13.7M shares and about $6.7MM debt, with unknown cash flow (guess about 400K / month) = may need to issue more shares to finance 2000 drilling.
I believe BEC is stronger on all the above points, but they do appear close. A critical factor is mgmt. Do you know who these guys are, or have you had any feedback from others? I'll put out some feelers with the local crowd.
P.S. Here's some numbers of interest: According to 1.5 x cash flow for LBR, and 13.44MM shares, and a price of .88/share, cash flow would = 13.44MM x .88/1.5 = $7,884,800 (cash flow) for 2000. When compared to BEC's forecast: 7.6MM shares x .72/share = $5,472,000 I'm suspect. If you interpolate (e.g. LBR's forecast is for 400 more boepd than BEC, using BEC's $5.472MM (e.g. 5.472MM x (1+400/1400)) to get to what BEC's cash flow would be if it averaged 1,800 boepd for 2000: you get $7,035,428.57). Bottom line: LBR's 2000 cash flow numbers are aggressive. Since BEC's selling 50% more oil (e.g. 60% oil vs. LBR's 40% oil), and, oil is worth substantially more than gas, well, I don't know. I'm using $19 oil for BEC. LBR may be using $21 (with a larger gas component however), which would bring them closer together, but lower BEC's multiple from 2.5 to (- 60% of 10% of 2.5 = .15) = 2.35. Yikes, it's getting late.
Regards,
JT |
