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

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To: Blitz1856 who wrote (112897)	11/1/2008 2:16:15 PM
From: Ed Ajootian	Read Replies (1) of 206151

Blitz, Vaalco Energy (EGY) -- thanks for reminding me about them, I have kept them on my radar screen but have not been focusing on them recently for some reason. They have a very impressive slate of wells that are coming up, starting this month. And as you say they are well funded, about as well as any other microcap E&P out there. Their cost structure is among the lowest in the industry, DD&A rate of about $11/bbl. an operating costs of about $9/bbl. The only downer is that confiscatory tax regime in Gabon -- if you don't keep putting your cash flow back in the ground you get really hammered. Vaalco, which has mostly just been sitting back collecting production checks for the last year or so, has seen its tax rate hover around the 60% range as a result. I'm gonna look at them some more though and will probably buy back some stock (I used to own this but sold earlier this year). Thanks again.

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