Yes, we'll know for sure it's over if we see on a magazine cover Uncle Sam hiking over the border with a barrel sporting a Maple Leaf under his arm, eh.
One thing about your figuring - if you consider debt, the boepd/$ is even less.
Tarragon is expected to owe 476 mil or so at year-end 98, I believe. It would take 2.7 years at current cash flow just to pay that off.
But on the positive side - it's a nice stable country with an attractively priced currency. Also, TN production is expected to increase more rapidly than most, liquids b/d 15,014-'97, 20,929-'98, 32,390-'99. Gas mmcf/d 174-'97, 214-'98, 244-'99.
Part of it is what you pay per barrel of reserves. Midland Walwyn shows a capital/boe (total cap - defined as market cap plus 1998 net debt, deferred taxes and working capital - to established reserves) for TN of 6.90 (using stock price of 9.95, so I figure Marathon is paying roughly $10/boe, about $7US) . Some of their cap/boe figures for other stocks, using 22/05 close for stock price; aec 10.31, axl 7.18, cnq 7.61, cxy 18.89!, crs 9.20, enl 8.72, gou 4.00, nrk 14.32, nen 16.83, pnn 15.81, poc 11.49, res 7.27, rax 16.49, tlm 10.08, tn 6.90. Average for above group 11.06.
Under 500mil market cap group - abc 1.28, bpl 7.34, bau 7.19, bvx 4.10, cid 11.12, cyz.a 12.06, prx 38.86!?, roi 18.07, ulp 9.12, zar 7.18. Average for that group 12.78.
There's a number of ways to measure the TN deal, but by this one it doesn't look so expensive - seven bucks American for a barrel of oil in the most stable of furrin countries.
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