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

To: Paul Senior who wrote (38976)	8/27/2010 1:36:15 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78471

re CEN.V - with 470M Can $ (447MUS$) market cap plus 40M Can $ in net debt and 23 BOE proved reserves (2/3 crude and 1/3 gas) the BOE is valued at 21$ which is not terribly cheap. The 2P reserves are emphasized in their NPV calculations which i think is a little bit aggressive (2P means that there is a 50% chance of economic recovery) Their 2P reserves are 2.3X their 1P reserves (typical value for a mature company is around 2x) so it does not seem that Coastal has a higher potential for growth than the average crude company. I ignore 3P or "resource potential" numbers entirely. Their proved reserves seem to fluctuate - from 18M BOE (2008) to 15M BOE (2009, the reduction is probably due to lower crude prices). if I take the Y2008 number, I see 18M BOE / 95M shares =0.184 BOE/share in 2008, compared to 23M BOE/113M shares=0.203 BOE/share in 2010. the balance sheet looks about the same in.2008 and 2010 ( about 40M Can $ net debt). This get's you a roughly 5% annualized ROA (based on BOE units). This all looks pretty mediocre to me. it certainly would not be a buy in my model. Of course with this kind of company, much depends on exploration success and this could either way. I cannot predict future results based on past track records and current reserves but I can say that based on what they accomplished in the past and what they currently own the stock does not look like a value to me.