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

To: Goldberry who wrote (4837)	3/17/1998 4:27:00 PM
From: Kerm Yerman	Respond to of 24910

Graham / Pinnacle Resources Pinnacle Exploration Ltd. (PNN-T: $12.50) BUY Fully diluted CFPS for the 1997 was $3.28 vs. $2.80 - in line with expectations. Pinnacle's $705 million capital expenditure budget (including the acquisition of HCO Energy and Wascana Acquisitions Inc.) replaced oil production by 18X and gas production by 9X at a finding and development cost of $5.45 on a proven plus probable basis ($7.20 proven only). Oil production in 1997 was up 45% year-over-year while gas production rose by 17%. Pinnacle is currently producing 31,000 bbls/d of oil and 130 mmcf/d of gas. We are forecasting 1998 production to average 36,000 bbls/d of oil and 145 mmcf/d of gas. Our fully diluted CFPS is $3.60 in 1998 and $4.50 in 1999. With the company's strong leverage to oil prices, its stock price has suffered significantly this year. However, should prices turn, we believe that Pinnacle will be one of the strongest performers in the oil and gas sector. Our stock price target is currently $15.00. ---------------------------------------------------------------------- Graham I think Pinnacle Resources is a good company to invest into, but not at this point in time. First, allow the price of oil to find it's bottom and stabilize. I see the third quarter of this year as a possible entry point into good companies with production weight in crude oil. My 12, 18 and 24 month price targets are $16.20, $20.25 and $25.00.