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

To: E_K_S who wrote (38660)	7/31/2010 4:41:52 PM
From: Paul Senior	Respond to of 78750

Bakken/oil. EKS, here's how I see it. Anything you (or anybody else here) can add or correct or clarify, please chime in. Yes, these oil companies are valued by things other than earnings per shares or dividends. More on cash flows. I'm still working on how I am valuing these companies. As I said in an earlier post, one metric I like is enterprise value to net asset value. I want something that I can screen for and/or determine quickly, and something that's "good enough". That is, something or somethings that provide conclusions not too far from what professional analysts or businessmen would find. I can get an approximation to enterprise value that generally works for me (market cap less net debt). Sometimes, some of the companies provide their enterprise value calculations. Net asset value is the issue. Sometimes companies provide it, sometimes not. When I can get it, I use proved and probable reserves and ignore possible. Sometimes companies use strip pricing, sometimes SEC pricing. Some companies provide "after everything", sometimes pretax, sometimes per well(before the companies wi amount), and so on. In other words, no consistency from company to company. Some companies provide reserves only in terms of mmboe. This (mmboe vs. mmbo) usually means they have both oil and gas (and nat gas liquid). I don't like this "barrels of equivalent oil" thing, because when management converts gas to oil by energy equivalent for reserve numbers, they then tend to value that in a ratio of the old -- and in my opinion now obsolete -- 6:1 price ratio. Anyway, I struggle along. I hold a few shares of CLR for tracking. I'm not planning to add more. I believe I may be too late for BEXP. OAS is new- I looked at it when it first came out, didn't see enough info.--I'll look again now. I have shares in NOG. HES was recommended on Bloomberg; it's on my list to review this weekend. AES -- I don't remember why I passed on it or how I forgot it. Will look closer at it this weekend.