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

To: Grantcw who wrote (37423)	4/17/2010 11:22:35 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78752

re NAV of E&P >>As you mentioned, I too don't really look at valuations based on mmboe, undeveloped land, or total oil and gas as main screening tools for stocks because I'm more comfortable with a NAV approach<< the problem with NAV is that management has a lot if discretion to determine what NAV is. Most firms put a value on undeveloped properties which may or may not be viable. Also be careful to subtract the going tax rates when the NAV is given as a pre-tax value (in some cases it is not clear which taxes are included in pre-tax values (royalty taxes etc.). The proven reserve number which enables you to determine $/BOE number is from the 10k and determined from an independent company , so there is a lot less opportunity for fudging.