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

To: Richard Saunders who wrote (4496)	1/15/1998 10:39:00 AM
From: HAZ	Read Replies (1) \| Respond to of 24927

Richard / Net Asset Value This quote was taken from Kerms' Korner MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY, JANUARY 12, 1998 (3) " All I'm telling people is that valuations are pretty much rock bottom at the moment, but that's not to say they can't go lower,'' said analyst Robert Hinckley, who follows the Canadian oils for Merrill Lynch & Co in New York. ''But in a long-term sense, we're at the bottom of the cycle right now.'' 'We're looking at (current) valuations that are just over four times cash flow and about 85 percent of net asset value, and they don't get much lower than that,'' he said. I would also agree that O&G stocks that are trading at 85% or less of NAV represent good value but I would also caution that this should not be the only measure for determining investment in a company. They may be undervalued from a NAV but if they are high cost operator then their balance sheet will deteriorate over time thereby decreasing NAV especially in the current low price commodities, high cost development, and limited capital markets environment. Cheers