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Gold/Mining/Energy : PetroQuest Energy, Inc (PQUE and T.PQU)
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To: Dave M who wrote (325)5/9/1999 7:49:00 PM
From: Ed Ajootian  Read Replies (1) of 686
 
Dave,

PQUE is one of the most undervalued E&P stocks out there at this point, IMO. In a coupla weeks they will start producing from that offshore well and at that point they will be generating cash flow at a rate of about $.50 a year. Its mindboggling to me that the stock can be bought for < 2 X one year's cash flow at this time.

Their book value was $.72 a share @ 12/31 and the offshore well discovered at least another $.50 a share in additional reserves.

Most significant to me, they say in the report that they have a carried interest in two offshore wells that will be drilled this year. Due to the high cost, folks don't bother drilling offshore wells unless there is a huge target.

I would hope that the company updates us with their '99 drilling plans when they put out their 1Q report this week. We would then see whether they have been successful at getting someone to farm-in to Turtle Bayou or buy a piece of that interest. The report (which was written in March) says they expected to spud their next Turtle Bayou well this month but I don't believe they got anyone soon enough to do that.

I have confidence that PQUE will find folks to farm in to their stuff. Their Turtle Bayou and Valentine prospects are all based on 3-D seismic which has already been interpreted and the prospects are drill-ready. Now that gas prices have come on so strong, any of the companies that have been sitting on their hands are gonna be anxious to get back in the drilling action, quickly.
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