Teton Petroleum (TTPT) -- Russian Oil Message Board

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Gold/Mining/Energy : Teton Petroleum (TTPT) -- Russian Oil

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To: Ed Ajootian who wrote (6)	3/30/2002 12:40:06 PM
From: Crossy	Read Replies (1) of 115

re: Nontraditional approaches to O&E valuation you say "it's pretty lonely at the top" - and actually I wouldn't say you are kidding. In fact you have been quite actively researching firms that I found later on, only to learn you have been there many a time before. Plays like HHLF or BNO... I found those firms by applying the "inverse" to your calculation of TTPT's oil reserve costs. You calculated implied cost=Marketcap / Barrels Oil in Proven Reserves.. Months ago I was making up my mind how to better value oil stocks (instead of Cashflow or PriceSales or PriceEarnings). I used the formulae: RRatio=BCFEs (gas equivalents) divided by marketcap. I noticed that ratio is mostly around 1-1.5. Cheaper plays had ratios in excess of 2. BNO had 10. TTPT has 16 now. HHLF had 7 in the past, around 2.5 now. I leave out debt and purposely omit any pricing of the reserves becuase I feel that oil&gas prices are going up steadily. So I just get a Qty Gas Equivalent per $ Marketcap figure.. Of course highly leveraged stocks have the "untouchable" status which usually makes them extra cheap. Once they sell off reserves and deleverage (see: BNO) the price pops and the true value is starting to be realized.. MAybe ABP and PNO are next in this category.. Being not too famiilar with O&E I tried to learn from experts like you. Saw you are DDing Callon Pete and Fortune Pete. Especially Fortune doesn't have a good Reserve/Marketcap ratio (just around 1). Do you feel that their drilling program can improve reserves so much (sort of "pre-empting" future reserves ??) best rgrds CROSSY

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