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Gold/Mining/Energy : Oil & Gas Price Economics

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To: Rod Copeland who wrote (14)	12/4/1998 9:01:00 PM
From: MskiHntr	Read Replies (2) of 350

Ed & Rod et all, I picked this upon another thread. It goes back to my question of a few days ago, that is, why explore for assets when you can buy them in the market place and they are proven assets? The Economist cites the following: "Another force behind the merger mania may be a perverse result of weak oil-share prices: it is now cheaper to buy oil reserves on Wall Street than by drilling your own well (see chart). This curious situation has prompted all sorts of takeover artists to buzz around the oil industry, looking for opportunities. Hicks Muse, one such firm, recently bought America's Triton and got its reserves for about $3 a barrel. YPF, a privatised Argentine oil giant, has gobbled up Canada's Bitech, and paid less than a dollar a barrel for its reserves. And these were all proven reserves. That's why I asked the question "Which companies are ripe for picking, i.e. a buyout?" We ought to be looking for those companies that are selling for less than the value of their proven reserves. In this regard I will be contacting my firm's oil analysts on Monday to see if they have any screens they can run which will provide us the information we are looking for. Best, Joe

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