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Gold/Mining/Energy : Daugherty Resources, Inc. (nasdaq: NGAS) -- Ignore unavailable to you. Want to Upgrade?

To: Dr_of_Microcaps who wrote (23)	8/17/2005 10:45:05 AM
From: semi_infinite	Read Replies (1) \| Respond to of 59

Well, as expected, production revenues up $2.5 mil but they somehow manage to come in $0.5 million below average consensus (eps of -0.03/shr). In other words, expenses went up $3.0 million. In the conference call, they blamed well problems at 3 wells costing overruns of $0.5 million. When the company has to drill 100s of wells (gross wells) and go deeper on a turn key basis, you anticipate some well problems and include that in the program costs. Not such a good excuse so there needs to be explanations of the other costs that must have risen. If they can't control costs better, and historically they have not, the only thing that can prop the business is ever increasing NG prices. IMHO that's not a good bet at any NG prices and especially at current prices. If NGAS is representative of what's left of US energy prospects, we are in deep doodoo. I don't think so and I have told my friend to look at other companies with better projects ie higher ROCE that can withstand a drop in WTI prices to $30-40 or NG price of $4-6. NGAS would be a huge money loser if NG prices goes down that far, and it could happen if a recession hits.