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Strategies & Market Trends : Value Investing
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To: Mattyice who wrote (39878)11/1/2010 8:31:26 PM
From: E_K_S  Read Replies (1) of 78777
 
Hi Matt - See my post ( Message 26928193 ) as to what I decided to do w/ the XCO.

Generally I think the proposed buy out offer confirms to me that there is value in many of these shale NG properties. With NG prices historically so low insiders are stepping up and buying shares in these companies. XCO is an interesting company as they have a lot of infrastructure capital investments deployed and working. Although not fully utilized, management can see that when NG prices get back to normal ranges ($5.00/mcf & relative to crude above $82/barrel), that their assets are worth north of $30.00/share.

I am still following several of the E&P companies mentioned on this thread and trying to build positions that I believe are still undervalued. With the XCO move today, I am focusing on those E&P companies that have already made some significant infrastructure investments but are selling near their lows due to low NG prices.

GMX Resources Inc. (GMXR) is one that Paul Senior has mentioned which I have been building a position in. In fact, I upped my position today by another 25%. They own property next to XCO and have some working drilling & NG gathering partnerships with them.

It's encouraging to see "real" money bids like XCO's come out as it verifies that there is still significant value in many of these properties,

EKS
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