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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (38873)8/22/2010 2:03:20 PM
From: Spekulatius  Read Replies (1) of 78644
 
re E_K_S / GMXR.
Intersting angle on GMXR Midstream business. I think there is indeed some hidden value, but the asset should already be on GMXR balance sheet at cost. I think it would probably fetch more than that if sold ,and that the differential would be value that could be unlocked.

I still wonder if we overlooked something with GMXR. one thing I noted are the high G&A expenses of 1.44$/MCFE while the much larger peer CHK ( which I do not even consider a low cost operator) stands at 0.34$. Even accounting for the difference in size,that is a huge difference and the real reason for GMXR's lack of profitability.

I wonder what the reason for the high G&A expenses is, 1.44$/MCFE is a lot of money if you need to sell for 5$/MCFE. Certainly, based on the proved reserves they have in the ground, GMXR is cheap, with a valuation of <1$/MCFE proved and that not even counts the undeveloped part and the land.
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