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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: ItsAllCyclical who wrote (66163)5/15/2000 12:08:00 PM
From: Big Dog  Read Replies (1) of 95453
 
Frost on Burlington Resources (BR). Target $59. Now 44 7/8

Burlington Resources has amassed over 10.2 TCFE of proved reserves, with nearly 6 TCF of natural gas reserves in
the United States. It is the fourth-largest producer of natural gas in the U.S., trailing only BP Amoco, Exxon-Mobil,
and Shell.
The natural gas fundamentals currently favor investment in gas-levered names, and Burlington is one of the few
companies with liquidity that has a high sensitivity to gas prices. We expect every $0.10/Mcf increase in the price of
natural gas to add $0.21 to 2000 EPS and $0.33 to 2000 cash flow. We also believe that its size, discounted stock
price, and clean balance sheet make Burlington an attractive acquisition candidate.
Burlington?s stock price only recently began to move up, and we believe that it is still lagging the group. In recent
years Burlington has traded over 8.5x cash flow in the peak cycles. Currently, the stock is trading at around 6x our
estimated 2000 cash flow of $7.32 per share.
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