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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (31276)	6/26/2008 12:27:28 PM
From: E_K_S	Read Replies (1) \| Respond to of 78702

Hi Jurgis - I would have to agree with you. Petroleo Brasileiro (PBR) may be a more conservative play for ethanol & biofuel production than CZZ. PBR is researching the economics of a large-scale cellulosic ethanol plant and stated they could be in operation in three to five years. In Brazil, the feedstock would be sugarcane bagasse, a residue from ethanol and sugar production, as well as other parts of the sugar cane plant. PBR announced yesterday that they will complete its first of two ethanol-only pipelines and first ethanol mill in 2009. They also plan to build a second pipeline between the center-west state of Mato Grosso do Sul and Paranagua port, in the southern state of Parana. The pipelines aim to improve efficiency and reduce producers' costs in transporting ethanol to the ports from Brazil's countryside. I have added to PBR recently as they have the best overall growth opportunities for oil, NG & biofuel(s) development & distribution (w/ company owned pipelines). You do pay a premium for this at 19x PE when you can buy other integrated oils for 10-12 PE. The most recent McDep report (May 2008) values PBR at a 11% discount to its current price of $67.50/share. Petroleo Brasileiro SA - Raise Net Present Value to $75 a Share mcdep.com The McDep summary report still shows the other major integrated oils selling at a 20% to their NPV. I tend to use their McDep ratio as a gauge to measure "realative" value. mcdep.com EKS