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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (46753)	2/29/2012 1:37:03 AM
From: Spekulatius	1 Recommendation Read Replies (1) of 78515

XCO - have you looked at their last presentation. They talk about unit cost but don't mention their DDA expenses. net debt per PD- 1.92$ Debt to adjusted EBITDA ~3.1. Production falling next year with debt being about the same (or 200M$ lower if they can sell their midstream assets). Ouch! Ouch! Ouch! If you owe 1.92$ PD(in the ground, add lifting and transportation cost ~1$/PD) and the spot price for PD (above the ground) is 2.5$ you are basically underwater. I can easily see the equity going to zero in this case. Check the 4th quarter review for the relevant numbers: \http://www.excoresources.com/presentations.htm

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