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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (4495)	1/15/1998 1:31:00 AM
From: Richard Saunders	Read Replies (1) \| Respond to of 24927

Anyone with access to numbers/ Looking for Net Asset Value perspective. QUESTION: What are some reasonable rule of thumbs to possibly be considering regarding share price and NET ASSET VALUE? Extremely interested in junior producers and am trying to figure what sort of premium or discount to n.a.v. would be useful for screening oil/gas stocks............

To: Kerm Yerman who wrote (4495)	1/15/1998 11:30:00 AM
From: HAZ	Respond to of 24927

Kerm / Spire Energy I called Spire Energy yesterday to confirm that Bob Lamond or Humbolt owns an equity interest in Spire. Answer : Humboldt holds 27 % of Spire and Bob Lamond sits on the board I thought that Bobby may end up at Spire since they are a Natgas company but I was proved wrong today when Diaz announced he is the new Chairman and Ceo. Here is an update since third quarter report. drilled 3 wells, 2 successful, one dry hole dry hole on Abee property extending the Wabamum to the north, 1000 meters, gas found in the upper zone, Spire didn't own the rights to this zone and consequently sold the well to Renaissance Energy to recoup part of drilling expense. This was a surprise, they expected to hit the Wabamum (technical jargon for missing the zone) they will drill again in a near by location. 2nd well on production at .5 mmcf/d, capable of higher production 3 rd well south of Anan, new pool discovery, will produce at .5 - .75 mmcf/d no drilling since early in December, rigs still tight supply Spire only needs 2 day window to drill a shallow well current production at 12 - 12.5 mmcf/d 2 mmcf/d behind pipe in Onan, looking at building a 5 mile pipeline to connect to Benton plant tie in will cost 500 k versus 1 - 1.5 million for a new gas plant issued shares in December to get cash in the door, debt stood at 3 million on 31-dec-97 7 million credit line available for 1998 capital program 12 million capex for 1998, the highest ever for Spire hired another geologist, now 3 full time and one geo-phyicist on contract to interpret seismic when needed some higher impact wells are on the horizon as they target deeper formations. Bottom line is they guys are producing gas at average cost of .33 Mcf/d and selling it for an average price of 1.60. This is still a very good margin and as mentioned in an earlier post they have locked in 50 % of production at 1.90 price range. As new production comes on stream in 1998 and is sold at spot which is trading lower right now the average gas price expected for 1998 will decrease slightly to the 1.50 - 1.60 range. On the positive side long term contracts are climbing as new pipeline capacity comes on stream starting in Q4 1998. November/98 contract is trading at around 1.90 Mcf/d. These guys are also risk averse and I expect some decent results in 1998. Cheers for now

To: Kerm Yerman who wrote (4495)	1/15/1998 1:58:00 PM
From: SofaSpud	Read Replies (1) \| Respond to of 24927

Kerm / Debt The company I alluded to yesterday was Highridge. Got a bit of an update today which suggests that the company is on top of things. Average cash flow for 1997 is about $7.5 mil., and exit debt is about $14 million, which gives a 1.9x debt/CF. But: - if the exit rate is 3000 boe/d; - half their gas is locked in at $1.94 through 1998; - 1 mmcf/d is locked in at $2.19 through the winter months; - so they might plausibly average $1.55/mcf in 1998; - if they average US$17/bbl then a CF of $12 or $13 million is plausible. With no change in debt, you get pretty close to 1x. Wildcard is whether they borrow. The company had announced a capex program of $23 million in 1998, which is under review. It is certain that it will be reduced, but they have not announced by how much. I would think that a bottom for the capex program is 1x CF. Focus will be on development rather than exploration. That said, it sounds like they intend to keep their options open -- if an opportunity lands in their laps (which is very possible in this environment -- how many companies are scrambling out there?), they intend to be able to exploit it. Bottom line-- exit rate for '97 was about 1.2x D/CF, reasonable chance that it will be below 1.5x on average during the year. Close to the edge of your criteria, so we're depending on management to be astute.

To: Kerm Yerman who wrote (4495)	1/15/1998 5:09:00 PM
From: RIK	Read Replies (2) \| Respond to of 24927

Kerm / Cash flow I believe we have gone off on a tangent with respect to terminology. Your post [4445] said we should look at stats on a " debt adjusted basis ". My post [4484] essentially requested some elaboration of the stats you are looking at. Your next post [4490] introduced the term "debt adjusted cash flow " which is , I believe the opposite of what you are interested in determining. Since cash flow incorporates debt servicing......debt adjusted c.f. would only add debt service charges back in - resulting in a number that is larger than cash flow .......i.e. the greater your interest charges.......the greater your debt adjusted c.f. Is this a number you are interested in working with?