Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (29999)	2/18/2004 8:56:40 AM
From: jim_p	Read Replies (1) \| Respond to of 206092

John, Nice to see your still around. What have you been up to? "Why did they blame the Proven Reserves downgrade on high NG prices?" If that was their reason they are 100% wrong. The higher the price of NG the higher the amount of physical reserves in the ground. You calculate the amount of reserves up the point where the revenue equals the cost of production. The scary thing is EP's write off is based on $6.00 NG which is higher than it is today. One dollar drop in NG prices causes an extra $1.5B in write offs. If you have $5.00 NG at the end of Q1 you will see an additional 1.5B write off. Maybe they were saying that prices came down from when they were at the last ceiling test to $6.00 at 12/31/03??? I once had adjustments of 8% which is not that hard for a smaller company to do since one dry hole can condemn a prospect with proved undeveloped reserves given to it and I received a number of nasty letters from the SEC. After many discussions I was forced to restate the 10K and explain in detail the reason for the adjustments. We had one prospect that had so many reserves attached to it that we couldn't afford to drill it because if it was a dry hole it would have had a very negative effect on the stock price and borrowing base. 41% off on a company the size of EP with a very diversified portfolio of properties is nothing less than criminal. You can expect an SEC investigation and possible criminal allegations with many class action suits to follow. This could be the straw that breaks the camels back for EP. They have too much debt to survive in their current capital structure. I didn't listen to the conference call. I've know these guys for a long time and their dream was for EP to be a carbon copy of Enron. It used to make me sick listening to them on why Enron had a higher PE than EP and their rush to copy every move Enron made. JMHO, Jim