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

To: E_K_S who wrote (38756)	8/10/2010 10:42:19 PM
From: Paul Senior	3 Recommendations Read Replies (2) \| Respond to of 78627

RRC. EKS, I'm out and won't reenter. I'm not interested in their shales. The exploration on their shale properties is for gas, and I'm buying for oil. I'm building a position in HES, if it will fall. (Bought some today). I continue to buy small e&p companies where it looks to me like net asset value exceeds company's market cap. (Net asset value does fluctuate though depending on several factors, not the least of which is the price of oil.) Fwiw, I've posted that I've been buying these recently: adding to Equal Energy (EQU): Although only 52-55% crude and ngl, I like company's prospects for oil in its holdings in the Cardium and Pakisko fields. adding to Arsenal Energy (AEI.to/AEYAF.pk). Bakken/Three Forks play. 2pnpv (before tax) = $200M, vs. enterprise value of 120.5M sh. out x .82, plus net debt of $29M = $128M. adding to Ithaca Energy (IACAF.pk/IAE.v). North Sea. My notes show npv10 = $832M before tax, with company enterprise value, roughly, = 255M sh. out. x $1.65sh, plus net cash $6.5M = $427M. starting a tracking position in Emerge O&G (EME.to): 95% oil. Canadian heavy oil. Company producing 4800 boe/d now, and forecasts it will hit 7700-8000 by year-end. If it does, and that's viewed to be sustainable, stock might be at least a 50% gainer from current price. ========== Disclaimer: These numbers taken from my notes. I may not have the latest&greatest numbers that are published by the company; the way I'm intending to value these companies may not be correct or standard practice; and I may have made errors in assumptions or fact or in my calculations. In other words, just as I've been wrong many, many times, I may also be wrong now here on a number of significant industry/company/analyst aspects that I've failed to consider properly. I'll keep adding to my positions though.

To: E_K_S who wrote (38756)	8/11/2010 1:04:38 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78627

GMXR. EKS, as regards RRC which you like for its shale holdings, I'll mention one gasser I am buying, GMXR. GMX resources has contiguous holdings in the Haynesville, Bossier Shale and Cotton Valley Sands areas. Giving me some confidence, the company says the Haynesville and Deep Bossier have among the lowest break-even points among all (or almost all) the major gas shale plays in the US. Secondly, the company seems to pride itself on its gas hedging activities. Based on the company's drilling plans, based on the company's expected financing costs for that drilling, and based on current values, the company has said its stock price (now about $5.55) might be/could be/should be/ought to be at about $30.12 by 12/31/2012. Seems like an outrageous statement at this point. I'm in though (for a few shares), and I'm intending to wait to find out. === I believe some investors are going to get rich buying the right e&p companies now. If only I knew what the right companies were and had the confidence and desire and guts to make big enough bets on them.