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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Goldberry who wrote (7789)	11/14/2000 8:06:04 PM
From: Richard Saunders	Read Replies (1) of 24905

Graham - mkt. recognition. GOU. It's been a couple of months since I had some GOU and I didn't look at the recent qtrly. very closely and I never listened to the conference call. Suspect the co. will probably digest the acqusition and chug along over the next while. Co. today vs. just over a year ago is in much better shape although there's still a degree of debt. Some recent numbers I saw were assuming exit debt/cashflow at about 3.2x with 2001 exit forecasted to be about 1 point less. Re: your cashflow and earnings numbers - possibly tending towards the high side of the ballpark? I believe current estimates for fully diluted are just over $2.70 for cashflow for this year and just under it for next year (lower commodity prices being used in models). Earnings are just over $0.50 and just under for 2001. Market respect? Seems like that's a hard thing for most of the oilpatch. Liquidity in GOU is good however multiples that were commanded for oilpatch things in past cyclical peak parts of the cycle just aren't there. Using today's pricing P/CF of peers currently shakeout at just over 3.0x for 2000 cashflow and just over 2.0x for 2001. P/E of peers are also appearing at just over 9.5x for 2000 and just under 10x for 2001. Sooner or later the valuations and multiples will catchup and I guess that means that either prices will rise or things like lower oil & gas prices will bring the pendulum back towards normal. Personally I think GOU has made progress from where they have been and it does appear that they do have some interesting opportunities ahead, especially with some of the Crestar assets. Strange times - high oil prices, high gas prices, low cdn. dollar yet dumpster dive price levels in many of the unwanted oil & gas situations.

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