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Strategies & Market Trends : Value Investing
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To: Brinks who wrote (25022)10/15/2006 4:58:20 PM
From: Spekulatius  Read Replies (1) of 78744
 
I have followed DBLE for about a year but have no position - the reason being that the company has not executed all that well.

According to DBLE's latest presentation (and 10K), DBLE's PV10 pretax value is 126M$ (or 95M$ after subtracting 40% tax) After adding probable reserves of 59.97M$ (35M$ post tax) that's about 161M$. That is less than DBLS's 187M$ EV value. Those values are based on 12/31/05 gas prices, they would be quite a bit lower today since NG price trend has been down. To add possible reserves is a little bit risky. Most E&P have quite large possible reserves but they do not go into the valuation. Many knowledgeable folks have been saying that the above number underestimate DBLE's real value since the production profile of DBLE's CBM properties may lead to much higher overall volumes. That's a potential plus but hard to quantify. What i found disappointing during the last 12 month is that DBLE's volume have acutally been falling due to project delays etc. That's a big minus. With so many cheap gas stocks out there the above can hardly justify DBLE's stock price, IMO.

The big plus for DBLE is XMAS meadow. This could multiply DBLE's reserves but it's a wildcat, so risk is high and the cost are potentially high as well.

FWIW 2.5$ for proven reserves is an OK price nowadays, also i suspect that one can buy long life reserves like DBLE's for about 2$ in the ground. Possible reserves are valued at no more than 1$ , if that.

Here is DBLE's latest presentation:
sec.gov
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