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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: SofaSpud who wrote (4992)	4/23/1998 12:47:00 AM
From: Kerm Yerman	Read Replies (3) of 24918

David / Centurion I have never looked into the company and just for the identical reasons you mention. North Africa is not one of my favorite areas. The cash flow numbers you mention are decent for this type of operation at this point in time -- if they are based upon the 65 mil. fully diluted shares outstanding. David, I have a hard time determining if an international junior oil may be a good investment. It's not the analysis - rather the weighing of whether a play like this one is better than a domestic junior whom one can monitor very closely. There are some still good valued domestic plays. As example, I just received the annual report of Upton Resources and despite the considerable drop in share price - would appear to be a great investment at current share price. To begin, share price is at a good discount to net asset value. Land holdings are good with great holdings in bread and butter properties and other acreage with high impact potential. Shares outstanding is something in order of 16 mil. The company is forecasting an increase in annual production amounting to a total of 5500 bbl's/d - and that is ultra conservative in estimation as it is based only upon developement drilling. The company is already averaging 5300 bbl's/d. The only two negatives as I see it are (1) Short Term Reserve Life and (2) they are a dominant oil producer. There are others like Upton. Compare the two. They are comparable from a market cap. viewpoint. For me, it's a no brainer -- a decision based upon the known and unknown; The Williston Basin versus Tunesia/Egypt; value versus speculation. There are more advantages/disadvantages, but these stand out to me. As always, just one man's opinion - this time it was mine.

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