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

To: Madharry who wrote (46063)	12/28/2011 11:20:45 AM
From: Paul Senior	1 Recommendation Respond to of 78748

MHR article. Preface: I continue to have my doubts about my valuation criterion for $ per flowing barrel (of oil -- bopd). A metric on which I sometimes make buying decisions. I intend eventually to get some assistance/feedback from some of the more knowledgeable SI posters on the e&p threads. I understand of course that valuation includes more, sometimes much more, than only flowing barrel evaluations --- like the value of the lands held, 1pnav, eps, etc. Regarding the author's comment, "At 75,000 per flowing barrel this should be fairly conservative." There is what "should be" and then there is what actually "is". There is no way that I see that $75k is a conservative or realistic number now for $ per flowing barrel. And I'm talking barrels of oil. Not barrels of oil equivalent (i.e. including gas production) that the author is using. That $75k number is way too high for bopd let alone boepd -- to me it seems obviously way too high. Which brings me to wonder about the rest of the author's valuation analysis. That said, I believe MHR is undervalued. I have shares, so I'm hoping the company and stock do well. The stock's down from the beginning of the year. The way people have made money in it this year is to have traded it or by buying at the big drop(s) (e.g in Oct.). I'm guessing that fluctuations may continue, and I can rebuy my sold shares at a lower price than currently.