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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Claude Cormier who wrote (19604)	3/4/2003 6:58:58 PM
From: Ed Ajootian	Read Replies (2) of 206307

Claude, A neat little conversion web page for common O&G units is at santos.com As someone who has invested in E&P stocks for plenty of years when the average price was < $3, its nice to hear $3 in the same sentence as "collapse". The only way gas goes under $3 again is if all the energy execs at the majors and large independents do just the opposite of what their mantra has been for the last 6 months, and just open up the pursestrings and start drilling the marginal stuff again. I suppose there is still a very remote chance this could occur but if it did we would start to see a big ramp up in the rig counts in the next 4-6 weeks. This is because it usually takes about a month or so to get a rig spudded once you have decided to drill the well. Natgas prices went really nutty a coupla weeks ago so if the E&P industry was gonna lose all this new-found discipline and start drilling stupid wells because of natgas prices going nutty it would start to show up in the coming weeks. Give me some parameters of the size & shape of your favorite kind of company and I (we) can help you more in your natgas quest. E.G., range of market cap, institutional coverage or under the radar screen, pure commodity price play or exploration upside, "acquire & exploit" strategy vs. growth by the drill bit, etc. If you are looking for a "pure" commodity price play that is under the radar screen you may want to look at KCS Energy (KCS). They produce 80% natgas (vs. 20% oil) and are extremely leveraged, yet should still have an interest coverage ratio of >3:1 with $4 gas. I've mentioned them here before but haven't done a writeup because I was waiting to do it around now, a few weeks before they announce 4Q, but the stock has run up and I'm waiting for it to slip back down a notch or two first. If you want to stick with the bigger companies with heavy institutional interest you oughtta look at Comstock Resources (CRK). Also extremely high leverage to natgas prices.

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