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Gold/Mining/Energy : CPN: Calpine Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Clement who wrote (188)	12/13/2001 8:36:42 AM
From: Roger A. Babb	Respond to of 555

Cement, only time will tell as to which of our views about deregulation works out to be correct. Let's revisit this discussion about this time next year......

To: Clement who wrote (188)	12/13/2001 6:28:29 PM
From: Bob Rudd	Respond to of 555

Got this from >>12/12/01 MERRILL REPORT: ASSET VALUE PER SHARE Our "break-up" value for CPN assumes replacement value for each of the types of plant (geothermal, CCGTs and gas-fired peakers) and a value of $1.50 per MCF for 1.7 TCF of gas reserves. In addition, we have taken CPN's $13bn net present value (NPV) figure for the power sales contracts associated with the existing portfolio. Netting out debt leaves a residual equity value of approximately $17bn, or more than $40 per share.>> I consider this kind of 'bird in the hand' asset valuation far more conservative and reliable than 10 year DCF's with fantasy terminal values used to justify a lot of stuff today. However regulation/deregulation plays out, these plants and many more like them are going to be required to keep the lights on....especially once the weather normalizes and the economy rebounds.