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

To: Spekulatius who wrote (43934)	8/14/2011 5:34:12 PM
From: Paul Senior	Respond to of 78470

I chose EOG over UPL because of EOG's oil shale holdings and development. I don't have enough confidence or knowledge of either of these two to say if either is a buy now, or to just wait. My position in EOG is very small and accumulated at higher prices than currently. If EOG does fall back a bit more I expect I will add a few more shares. The decision for me is not totally grounded in valuation metrics. It is somewhat of a speculation and related to how long I expect to hold the stock --like several years, and my ability to endure losses with it (and other oil stocks held) until the company's prospects and stock improve, if they do. Risky to hold either now, I am guessing.

To: Spekulatius who wrote (43934)	2/17/2012 2:53:21 AM
From: Spekulatius	Respond to of 78470

Bought some UPL at 23$ despite some reservations. Since my valuation framework for E&P is reserve valuation, i believe that UPL is cheap: Currently they have 5TCFE and EV ~ 5.5B$, which means the valuation is 1.1$/mcfe. This is way below replacement cost (>2$/mcfe). They announced that they want to live withing their cash flow in Y2012, which is a good thing, imo, considering their debt. 1.1$/mcfe is a very low valuation for a company that has decent management and is a very efficient producer. Even though NG pricing outlook looks crummy right now, myt bet is that this is a low enough price to start bottom fishing. Message 26779012