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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (39020)	9/3/2010 12:28:38 AM
From: Spekulatius	Read Replies (1) of 78465

re PWE - the oil sands project has been talked about since 2005, as far as I remember - so far not much has happened. I assume it's not economical at this point. based on current reserves, PWE is quite a bit overvalued: 341M BOE (crude) x 15$=5.1B$ 938 BCF (NG) x1.5=1.4B$ Total is 6.5B$ but EV is 11B$, so i think it's overvalued quite a bit. the infill plan looks interesting but it will also cost Capex, I want to see the economics there to see where it get's them. Note Slide 19, on which they basically admitting that their F&D costs are near the top. Once all those tax credit expire (some royalty will kick in as soon as 2010 and then the Trust fund status will revert in 2013) then yields will go down and those Trusts will be valued just like any other E&P. Based on the metrics it seems that they are not worth more than 15$/share, maybe even less.

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