Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Gary Burton who wrote (41368)	3/31/1999 2:52:00 PM
From: SliderOnTheBlack	Read Replies (1) of 95453

GaryB; EEX info is per Dain Rauscher - when DR speaks people listen... ... Oilpatch experts as opposed to the ''Oil Amateurs'' at Bear Stearns <VBG>... March info from DR: Enterprise value $477 M Net Asset Value $7 Cash flow /CFPS $1.70 in 1999 & $2.24 in 2000 year end proved reserves 60.1 M boe DR: misc comments: Cheapest valuation in its peer group ...***upside potential to it's numerous deepwater GOM prospects is enormous for a company of its size (60M boe proved resv.). They have more than a few 100M BOE prospects. Target based on may factors - ie: 7 x multiple of of 1999 Enterprise cash flow - which is what many peers are ''presently'' trading for... current prospect Llano - not calculated into target pricing... EEX is an ''Exploration Play'' - plain & simple. They own some of the best GOM properties, have a fresh capital injection & numerous partners in which to aggressively pursue drilling program. Shell has huge Garden Banks discovery adjacent to EEX's LLano property that was just ''halted'' for additional Seismic/Drilling review... - selloff is ''sentiment & speculation'' driven imho. - see their partners Llano news releases from ETP & Pan Canadian... many differing valuation criteria can be used for E&P's - 5-9 x cash flow 130% of net asset value Traditional PE - least valid imho, and of course - the speculative potential of their exploration properties - this is what the EEX story is all about... and that is why the volatility and the depressed values presently - they shouldn't be valued, invested in, or traded, due to their present production/earnings etc - this is a success via the drillbit company - period. It is also priced accordingly - $5 off of bad news - $7 on anticipation of good news, $9-10 on the partial realization of ''any good news'' and back to a potential $15-30 on a major find, or two... and remember; this is a GOM play - not offshore Africa, Colombia, or Papau New Guinea....<VBG> - a little higher expectation for success in a ''known'' arena. A major plus is the success of other companies on many adjacent properites and the initial enthusiam over their seismic reports. - again; not a widow, orphans play...but, then again - neither was OEI !

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