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Strategies & Market Trends : Value Investing

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From: E_K_S	8/5/2008 12:32:26 PM
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Added to my ENERPLUS RES FD (NYSE: ERF) position. Enerplus announced that they closed the sale of their Joslyn Lease (a 15% working interest which nets the company $500 million). The company stated that "...The proceeds will initially reduce bank debt, further improving our debt to cash flow ratio however we expect to redeploy the funds toward accretive acquisitions and development opportunities in the future....". Based on the July 2008 McDep Oil & Gas report, ERF is selling at a 26% discount to its present value (based on a $43.87 market price). The McDep Present Value analysis presumes long-term prices of $100 a barrel for oil and $14 a million btu for natural gas. mcdep.com Many of the integrated oil companies IMO are over sold based on the recent drop in the spot oil price. These companies were valued at much higher prices when oil was at $100/barrel. It's possible that the market is forward looking to much lower oil prices and a threat of a windfall profit tax on the major US integrated oil companies. Therefore, I am more inclined to add to the non US Oil & Gas producers such as PBR, ERF, PWE and PCZ. EKS

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