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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: SofaSpud who wrote (7807)	11/24/2000 1:49:44 AM
From: Richard Saunders	Read Replies (1) of 24905

PSN POST - Gas band wagon - an "interesting" press release was pushed out Thursday afternoon re: 3Q numbers. isdnwire.com Press release is titled "Post's Deep Program Pays Off". I won't argue one way or the other re: that, there have been some successes. Thing that might be worth taking a little closer look at is "Production was 76% weighted to natural gas and natural gas liquids." With all the news and talk of high gas prices then that statement would almost seem like a really good thing. Careful though.......... natural gas liquids are valued completely different than natural gas. In the qtr. just completed Post received the equivalent of $38.80 per boe for natural gas ($3.88/mcf). The "natural gas liquids" obtained $29.72 per barrel and oil received $44.13 per bbl. All the prices are great if looking in the rearview mirror a year ago. Compared to peers the prices are middle of the road. Back to the percentage quote - the 76% number. Most companies convert natural gas to barrels of equivalent using 10mcf per 1 BOE. Also, most companies lump natural gas liquids (NGL) and crude oil into the "crude oil" category when describing their production split. Post's release isn't really untrue however if the percentage production split were to include the NGL in the crude part of the picture Post could be considered more a balanced producer.......... The 76% 3Q number for Post would actually become "Production was 53% weighted to natural gas." Not stated in the press release however reference to 1Q and 2Q filings show some changes in the 3Q compared to 2Q: - Revenues increased 17% - Cash Flow increased 29% - Income increased 19% - Production was flat however % gas changed from 49% in the 2Q to 53% in the 3Q. Avg. production was 4,795 boepd. - Net debt increased 1% and is now just over $39mil. More 3Q numbers: Cashflow was $22.73 per BOE Cash costs were $9.41/BOE Net Income was $9.24/BOE All relatively good numbers but the 76% natural gas comment with the newspaper headline forced a closer look.....

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