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Gold/Mining/Energy : Oil & Gas Exploration & Production Co.'s -- Ignore unavailable to you. Want to Upgrade?

To: sam_n_cctx who wrote (21)	1/12/2003 11:52:36 PM
From: Ed Ajootian	Respond to of 112

Sam, Glad to hear you are still onboard here. The last release was good news/bad news but the key point was that they met analysts' projections for 1Q '03 production. For example, Jefferies had them pegged for 20,482 bopd for 1Q and in their PR, EPL is projecting for 1Q production to be in a range of 20,000 to 20,500 bopd. Given the other production scheduled to come on in 2Q and later, together with likely new production from subsequent exploration successes, it would seem that the analysts will be compelled to increase their production estimates for the rest of the year. For example, Jefferies had projected 2Q, 3Q and 4Q production of 20,974, 20,067 and 19,886 boed respectively. Just based on wells already completed they should do much better than the projected 3Q #. Right now, if you fully load up the diluted shares outstanding by the warrants and convertible preferreds that are in the money, the stock is still trading at about a 3 multiple of cash flow (assuming $4 gas for '03), which is extremely low considering the 3 million $11 warrants are just barely in the money at the current quote. I believe the analysts will start announcing their opinion upgrades this week, with some new initiations of coverage to come after they announce year-end reserve numbers on 2/6. Hopefully the preferred shareholders will take this opportunity to blow out a lot more of their stock so that we can reduce the amount of the preferred dividends that we will have to pay out from here on.

To: sam_n_cctx who wrote (21)	1/22/2003 6:08:01 PM
From: Ed Ajootian	Read Replies (1) \| Respond to of 112

EPL, Energy Partners Ltd. -- They just announced another huge exploratory success, in their East Bay field, see biz.yahoo.com This well found the most pay ever for them I believe, 308 feet! Just to give you some perspective, a "good" well on the GOM shallow waters maybe finds 50 ft. of pay. Also most of the sands it encountered were updip to sands that were being produced from other wells in the area, so there should be more pressure in this one. This company's stock has hit a brick wall at the $11 mark due to some dilutive securities at or below this quote, but I believe the necessary earthquake to blow through that wall has now been acheived. I would expect this well to have discovered 20 - 30 BCFE of hydrocarbons, and EPL owns 56% of it. EPL has already (i.e., prior to this well) announced that they expected their production for 1Q to be 30% higher than 4Q '02. Too bad RJ didn't include EPL in their study! I'm calling for EPL to generate about $125 M of cash flow in '03 based on $4.25 gas. This works out to about a 3 multiple of cash flow per fully diluted share, and about a 4 multiple of Enterprise Value / EBITDA. Also, their president has just done an interview on www.ceocast.com that you may find of interest. (My experience with those are that they are mostly worthless due to the inane questions that are posted by the interviewers). BTW, at the ceocast site they are offering a conference call tomorrow afternoon on energy stocks in general, which you may also find of interest. I never used to even bother looking at stocks with market caps over a coupla hundred million dollars, thinking that the market would be too efficient and would price these stocks correctly given their progress (or lack thereof). My experience with EPL has indicated that even stocks with $300 M market caps can be inefficiently priced. Anybody looking to get into an E&P stock whose price has not run up outta sight yet should take a look at EPL. They announce 4Q, year-end reserves, and '03 plans on 2/6.