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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: double-plus-good who wrote (47162)	7/1/1999 2:29:00 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

re: CRK - Big Bull / double plus-good ... + 11% today hmmm (VBG) <<my info is that CRK is 60% hedged through the third quarter at 1.81. talk about nailing the bottom of the market. my view is that the step was taken in order to insure the survival of the company.>> ...the hedge was not necessary to insure the survival of the company; but with their private placement of pref stock & refinancing - I would venture to say that this was a ''term'' putting a floor under any worst case scenario, required for these new financing/liquidity agreements. There are so many metrics of valuation with E&P co's that I would use a ''multiple of cash flow'' - peer group avg of 4-9 x cfps and the ''adjusted fair market value per share'' of PV-10 of $13.92 ($4.72 oil, condensate & NGL + $9.20 Nat Gas) + .06 undeveloped acerage, +/- working capital (.19) +/- longterm debt ($7.76) = $6.03 + CRK's Boise d'Arc Prop w/ low risk prospects conservatively valued at $2.82 (21.2 M MBoe est) = a total fair market value per share of $8.86. cfps - $1.92 for 1999 & $2.26 for 2000; this is without ''tripling'' their cap ex budget for the remainder of 1999 - which comes from the new liquidity and is not reflected in these cfps estimates.... 5 x $1.92 = $9.60 this year presently and 5 x $2.25 = $11.25 for 2000 and again, this is without the stepped up cap ex spending ! ...again; fwiw - imho; the EASIEST double in the entire Oilpatch and I will eat $hi^ by the spoonfull at our Rig Party if this doesn't see 10 by next April 1st. ... all it need is an ''average'' peer group cfps valuation - and it will get it when the hedges come off.... good luck PS - good news on MEXP late yesterday.... this is a boring, non-headline, put you to sleep 3-4-5 bagger that will take a while to develop. But, it will be a $7-12 stock again...and is worth the wait - there is no BK risk - the bottom is in - period.