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

To: Paul Senior who wrote (48209)	6/1/2012 3:11:42 PM
From: vireya	Read Replies (1) \| Respond to of 78667

McDep Arent they the ones who love Kinder from KMI/KMP/KMR etc?

To: Paul Senior who wrote (48209)	6/3/2012 5:02:38 PM
From: Spekulatius	1 Recommendation Respond to of 78667

Kurts methodology favors long life assets like the oils sands assets that SU or COSWF owns. He looks at ratios like reserve life (high with oil sands) versus EBITDA and such. High reserve life mostly means high ratings in Kurts system. I do not think his method take the cost inflation and maintenance requirements that are needed to keep this oils sand assets producing into account correctly. For example COSWF has huge Capex outstanding in 2013/2014, just to keep production steady. On the other hand, once an oil company has started production on a major oil field, these produce with ery little Capex for 10 year typically. I do remember Kurt's feud with Kinder Morgan. Kurt was applying an E&P method for value estimates to a pipeline company like KMI/KMP, which I think was proven to be wrong. He would have gotten the same results with any other pipeline MLP. The key with a pipeline MLP (at least those with major backbone pipelines) is that the operating span is very long, exceeding 30 and in some case 60 years. They keep producing ever increasing cash flow long after they are depreciated. Kurt's method does not take this basic fact into account. Overall, I found Kurt;s method somewhat useful but I would not take his results as a gospel. It is a good starting point for research though and it's totally free to use.