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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Obelix who wrote (6971)	11/20/1999 10:43:00 PM
From: SofaSpud	Respond to of 24905

Obelix / Newport I don't know if there are rumours going around about NPP, but for sure the street is disappointed in them. They've put together a ton of potential, but they haven't managed to translate that potential into production growth. In the meantime, they've racked up the debt, big time. Seems to me the market is saying SHOW ME. JMO, BWDIK.

To: Obelix who wrote (6971)	11/20/1999 10:44:00 PM
From: Richard Saunders	Respond to of 24905

Obelix - NPP Newport. Q3'99 cashflow of $0.25/share & production of 23,471 boepd. 3Q report also indicated that a Wabumun well in the Chicken area of Alberta will be suspended and a new well re-drilled (3-4 MONTHS TO DRILL) adjacent to the suspended well. I believe total costs on the suspended well were about $18mil and npp has a 40% w.i. Q3'99 net debt is between $250 & $260mil.; capex for '99 has been increased from $210mil to $260mil. Bottomline, possibly a couple of reasons for laclustre drift down? One is "so-so" perceived results, company still seems to be serving some time in the penalty box for failure to produce better results. Current price is also offering some tax-motivated decisions to those with capital gains elsewhere.

To: Obelix who wrote (6971)	11/21/1999 3:53:00 AM
From: Richard Saunders	Read Replies (2) \| Respond to of 24905

obelix - further npp followup. Noticed something "interesting". Was scribbling on the back of the envelope for a few situations and trying to see what some companies had been tossing off for cashflow on a barrel of oil equivalent basis. For the 3Q'99 there are 92 days. For the YTD up to the end of Sept. 30 there are 279 days. Bonavista is trading at lofty levels but let's use them for an example. In the 3Q'99 BNP was converting 63.7% of revenue into cashflow. That translated into $17.57 CF/boe. For the 9month period the revenue to cashflow conversion was about 63.5% or $15.52 CF/boe. Run the same routine on Newport. 3Q'99 - 47.7% revenue to CF conversion for $10.18 CF/boe. The 9 month period shows a 46.7% revenue to cashflow conversion or $9.18 CF/boe........... I haven't tried to check further to see specific reasons for "low" cashflow/boe however suspect there-in will lie the answer to your question about "what is happening"........... I've a few shares in an illiquid trader that has just moved from 2Q production of under 700 boepd to 3Q avg. of just over 2800 boepd. Increase was done by acquisition so one could argue that change of owners would result in some initial transfer glitches, etc. As well, product is a bit weighted on the medium oil side of the scale and doesn't command the same price as lighter grades. Even with that situation (Avid avo.a-ase) the 3Q cashflow per barrel of equivalent -- based on the 92 day average -- was $14.53 CF/boe. If you're the optimistic type I 'spose you could argue that Newport has an awesome opportunity for improvement........... improvement in fundamentals could result in an improvement in price as well as the current p/cf multiple. Until improvements are fairly obvious suspect the door on the penalty box will remain closed.......