Dale,
I am usually a lurker, but I am also a PRC investor. I had an interesting conversation with the former IR guy for PRC today. He indicated to me, strictly investor to investor, that although this quarter will probably suffer as a result of write downs that EA alluded to, PRC has some compelling positives.
First, they put on some hedges earlier last year at over $100 per barrel. Second, they seem to have a good relationship with CIT, so maybe the write downs won't severely impair the availability of credit for operating capital. Third and most important, is that PRC's total reserves are now about 10 million barrels. Acquisition deals in Houston these days are going for $18/barrel (in answer to your question) for what is still in the ground. With only 36 million shares O/S, it is clear that PRC's break up value is far in excess of its current paltry SP. Yes, this would be mitigated by any debts needing to be paid, but even if you reduce the reserves valuation by half for the debts, it still leaves you $2.50 per share. And that's worst case scenario - the company can no longer continue to operate and needs to sell out.
At this point, 25 cents a share is a joke IMHO. Take it for what its worth.
Franco |
