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

To: isopatch who wrote (80505)	12/1/2000 11:01:53 AM
From: hitsoft17	Respond to of 95453

Iso and all, I am a little new at the oil/NG investing and am having trouble rationalizing the NG business. I hold a medium position in CRK Comstock Resources and am thinking of using the recent weakness to add some. The best I can tell it looks something like this...... - Given recent price (around $9 ) weakness, current P/E is around 10, expected consensus P/E is around 6. -Price to cash flow is 2.5/2.7 -Expected consensus top line growth is 20% for next five years ( anybody's guess) - Last qtr NG production was stated as 9.3Bcf at an average price of $4.69/mcf -They go on to state they have added wells to the tune of 4.0 Bsf a qtr in the last couple of months. -If you assume the price of NG for CRK stays at $4.69 (even thought the contracts are running above 6), thats a growth at top line of 40+%. -The outlook for NG supply is stable at best and short by a bunch at worst indicating stable prices. Assuming I read the report right and haven't misstated anything, the best I can tell this outfit is worth between 15 and 20 a share. What am I missing, or is it just the market sentiment currently? Hitsoft17