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

To: Roebear who wrote (68203)	6/14/2000 11:58:00 AM
From: jim_p	Read Replies (4) \| Respond to of 95453

My stock pick of the year is KWK. I just bought a lot at $7.00. I just finished reviewing the most recent acquisition for KWK. I expect the earnings and cash flow per share to more than double in the second quarter and thereafter for the year. At $7.00 the company is selling at less than 2.9 times this years cash flow, and 2.5 time next years cash flow. On March 31, 2000, the Company completed the previously announced acquisition from CMS Oil and Gas Company, a subsidiary of CMS Energy Corporation, of properties located primarily in Michigan for approximately $164 million. The CMS properties consist of interests in approximately 3,050 gross (650 net) producing oil and gas wells located on approximately 512,000 gross (450,000 net) acres. Schlumberger Holditch estimated proved reserves attributable to the CMS acquisition to be 315.1 Bcf of natural gas, 747.8 Mbbls of crude oil and condensate, and 143.9 Mbbls of natural gas liquids, or a total of 320.4 Bcfe with an estimated SEC PV-10 value as of January 1, 2000 of $184.0 million. Approximately 81% of the proved reserve volumes are classified as proved developed. Current net daily production from the CMS properties is estimated to be 49 Mmcfe. On a January 1, 2000, pro forma basis, the combined oil and gas reserves would be 610 Bcfe with a SEC PV-10 value of $437.5 million. The acquisition was accounted for under the purchase accounting method with a January 1, 2000, effective date and a March 31, 2000, closing date. The first quarter Balance Sheet will reflect the acquisition; the net revenues, however, for the first quarter were accounted for as a purchase price adjustment. Production, revenue and expenses related to the acquired properties will be reflected in the financial statements beginning in the second quarter. Buy it now while you can. Jim