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Gold/Mining/Energy : Saxon Petroleum (SXN-TSE) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Trencaroff who wrote (18)	11/13/1997 12:10:00 PM
From: mark calgary	Read Replies (2) \| Respond to of 24

Couple of reasons for valuation: 1) Cavell just sold 300 barrells production for 7.5 million 2) Saxon late 3rd quarter production was above 3,000 barrels in addition to gas production. 3) 84 million in plant, property and equipment. 4) total debt is 37 million So current market for long term reserves $24,000 per barrell ( Cavells field that just sold is very much like Bigoray - early stages, but very successful from a drilling standpoint ). 3,000 X 24,000 = $72,000,000 Gas production 9200 X.10 = 920 boe X 24,000 = $22,080,000 84,000,000 - 37,000,000 = 47,000,000 Grand total = $141,080,000 discounted 20 % = $112,864,000 $112,864,000 divided by 95,000,000 shares = 1.18 per share Currently you are seeing small production transactions taking place - it is becoming very difficult to get your hands on a fair size chunk of production along with the land packages of the size that Saxon has. Throw in a nickel or two for the companys undeveloped acreage and you're at a buck and a quarter - at least that is how I see it. The thing is don't get hung up in the numbers. Deals are happening all over the place as values for production and acreage are going through the roof. Now is a good time to have something up for sale. You have firms that are not going to make targets for production, and the only way they can stay out of trouble with the brokerage houses that support them ( who have sold numbers to their clients) , is to buy production. I think $1.25 is cheap for this company, and if purchased by a first class junior I think I might convert as opposed to cash.