All/ Kerm's Portfolio
For those of you who monitor my portfolio listings, I'm going on record with a transaction made yesterday.
I sold 350 shares of Crestar Energy at $17.50 for total proceeds of $6,125.00.
In turn, I purchased 500 shares of Cabre Exploration at $12.60 at a total cost of $6,300.00.
The negative variance of $175.00 cash is covered with the cash position of the portfolios.
Crestar is the heavy weight (20.0%+) single issue in the portfolio and I decided to lower the percentage of the holding by taking profits. I still hold 1450 shares of Crestar and will hold for further upside.
I have liked Cabre Exploration for some time and really should of made the entry into building a position earlier in the year.
The company generated earnings of $959,000 (0.06 per share; $0.06 fully diluted) compared to a loss of $782,000 ($0.04 per share; $0.04 fd) in 1998.
Cash flow increased 28 percent to $12.5 million ($0.74 per share; $0.72 fd) from $9.8 million ($0.56 per share; $0.55 fully diluted).
During this past quarter the company produced a daily average of 57.3 million cubic feet of natural gas and 10,223 barrels of oil and liquids, up four percent and three percent respectively from 55.1 million cubic feet and 9,894 barrels of oil and liquids in 1998. This compares to fourth quarter 1998 averages of 51 million cubic feet of gas and 10,129 barrels of oil and liquids per day. The company estimates it is currently producing over 80 million cubic feet of gas and 10,800 barrels of liquids per day.
The company added 4.6 million barrels of energy equivalent ("BOE") of proven and probable reserves during the quarter, converting gas to barrels of energy equivalent at a 10:1 ratio.
The company replaced its production of 1.435 million BOE by 2.4 times based on additions of proven and one-half probable reserves.
Total net undeveloped land holdings at the end of the period in Canada is 769,622 acres.
At the end of the period there were only 16,844,708 shares issued and outstanding.
The company's debt, net of working capital, was $161.9 million at March 31. This follows a capital intensive period over the last six months where over $71 million has been invested, of which $32 million was directed towards facilities infrastructure. The company plans to reduce debt in the second quarter by way of non-core property sale proceeds and dedicating a portion of cash flows generated from higher production volumes and increased oil and gas prices towards debt repayment with a target of $145 million in total debt by the third quarter.
The company plans to reduce debt in the second quarter by way of non-core property sale proceeds and dedicating a portion of cash flows generated from higher production volumes and increased oil and gas prices towards debt repayment with a target of $145 million in total debt by the third quarter.
Year ending cash flow targets and planned debt reduction will bring the debt to cash flow multiple to a level equal to operating peers, if not a bit lower.
The company's current 1999 capital budget excluding property sales remains at $82 million including $9 million internationally and may be increased if oil prices maintain their strength. At current prices and estimated volumes, 1999 cash flows could exceed $70 million ($4.15 per share, $4.03 fully diluted).
My purchase is 3.0X 1999 estimated cash flow. |
