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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: jim_p who wrote (76555)10/17/2000 6:12:31 PM
From: Archie Meeties  Read Replies (2) of 95453
 
The depletion sword cuts both ways. I remember discussing with somebody on TMR yhoo board (what a wasteland that is) about the possibility that an explorer who had an extensive library of small, high initial production/rapidly depleting wells should be analyzed differently than one with a mix of larger targets. The PV values will favor the latter, but earnings growth the former!

As the reigning factor in determining share price today is earnings growth, my guess at that time was that a successful driller of small wells with high initial production would ramp earnings far faster than predicted and also outperform an outfit with larger targets in the initial leg of an energy bull. (and perhaps underperform thereafter).

Thoughts along those lines were one of the reasons I bought TMR last year despite the Shell prob and the massive debt. CRZO and iso's ESNJ fit into the category as well.

I'm sure it's nothing new to anybody within the industry, but well, that's not me. -g-
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