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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (38105)	5/29/2010 5:34:48 PM
From: Spekulatius	1 Recommendation Read Replies (1) of 78704

more ATPG - the other problem that I see with the NPV calculation is the reserve valuation. They own about 212MBOE (proved and probable) so with an EV of 1.7B$ that is about 8$/BOE. This seems low but not much lower than some majors. My favorite TOT for example owns 10B BOE proved and about 20B BOE proved and probable and the total EV is 120B$. So per BOE I arrive at a # of 12$/BOE (proved) and 6$ BOE (proved and probable). Well that is cheap too. Now ATPG reserves could be worth more because they are located at the GOM and royalties are very low in the US compared to almost anywhere else in the world, but now we need to throw in a discount. Now is ATPG cheaper or more expensive than TOT you can guess this yourself. Still I am tempted to play ATPG - the price seems to swing so much and if fears are overblown, this will get back to 20$ fairly quick. Worst case we have a zero but I think that 20$ are much more likely than zero and there is potential for prices substantially >20$ too, so I think risk reward is favorable.

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