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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Cogito Ergo Sum who wrote (38434)1/17/2005 7:17:40 PM
From: Ed Ajootian  Read Replies (2) of 206209
 
Spotted, GMXR -- I have sold down a big piece of my position also. It's getting old waiting for them or PVX to get a new rig going, and the economics of their play have been shown to be not as good as originally thought. They spent $8 M on cap ex for '04 and this produced 12.5 BCFE of new reserves, which sounds great, but when you drill down you see that they basically just marched in place with respect to their proved developed reserves and all the additions to proved reserves (other than replacing their 1.2 BCFE of production) were in the PUD category. There must have been some pretty serious negative revisions to their PD reserves last year.

Anybody can book PUDs till the cows come home, (especially in East Texas), but the key is how much PD reserves you are generating for your money (net of revisions).

Another reason I have sold some of this is that they are heavily weighted toward natty vs. oil, whereas my relative sentiments for the commodities lie in the other direction.
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