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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (176252)	1/31/2013 9:43:15 PM
From: dvdw©	1 Recommendation Read Replies (2) \| Respond to of 206347

just remember bob, U can take the stock out of the contest, but you may not take the contest out of the stock... having provided this to informed capitalists over 4 years ago.... my job now............. simple observation

To: Bearcatbob who wrote (176252)	2/1/2013 8:09:23 AM
From: Dennis Roth	2 Recommendations Read Replies (2) \| Respond to of 206347

Doesn't seem to bother CS Energy XXI (EXXI), 31 January 2013 Lower TP to $42 on Reduced Production Guidance. We lower our NAV- derived target price to $42 (from $46) on reduced production guidance, but argue the tough operational quarter offers a solid entry for this catalyst-rich Gulf of Mexico shelf operator. EXXI reported F2Q13 production of 44.6 MBoe/d compared to our estimate of 49.5 MBoe/d and guided FY13 oil production to ~31 MBbls/d vs. implied 39.4 MBoe/d (midpoint of 52-56 mboe/d and 73% liquids) and our prior estimate of 37.5 MBoe/d. The company expects to exit FY13 ~40 MBbls/d, which we estimate will result in more than 25% yr/yr production growth in FY14. We lower our FY13-15 EBITDA estimates 14%/20%/17% on the reduced production guidance. Solid Initial Hz Results. EXXI completed three hz wells in the West Delta 73 field to date with estimated EURs of 1.2-2 MMBoe. At the high-end of the recovery range, we estimate an ~$11MM well would have an NPV of ~$39MM and an IRR of 105%. Assuming a 1.2 MMBoe EUR, we estimate a project NPV of $18MM and an IRR of 46%. The company now estimates it could have upwards of 40 hz opportunities at West Delta 73 alone and 100 projects across its asset base. While the mechanical issue at S. Timbalier 54 and a dry hole at Grand Isle 16/18 impacted the quarter, these issues by no means condemn the horizontal concept outside the WD 73 core area. Reiterate Outperform. EXXI is trading at a 25% discount to our revised NAV estimate vs. a 16% discount for the Credit Suisse SMID-cap E&P peer group. On multiples, EXXI is trading 3.5x 2013E and 3.0x 2014E EBITDA (unhedged at the futures strip) compared to peers at 5.5x and 4.1x, respectively. Despite a tough quarter operationally for EXXI, we expect that near-term exploration catalysts at Vermillion 179, Lineham Creek and Highlander, as well as, continued conventional hz success would drive material NAV upside, and as a result, we reiterate our Outperform rating.