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

To: Rod Copeland who wrote (14)	12/4/1998 9:01:00 PM
From: MskiHntr	Read Replies (2) \| Respond to of 350

Ed & Rod et all, I picked this upon another thread. It goes back to my question of a few days ago, that is, why explore for assets when you can buy them in the market place and they are proven assets? The Economist cites the following: "Another force behind the merger mania may be a perverse result of weak oil-share prices: it is now cheaper to buy oil reserves on Wall Street than by drilling your own well (see chart). This curious situation has prompted all sorts of takeover artists to buzz around the oil industry, looking for opportunities. Hicks Muse, one such firm, recently bought America's Triton and got its reserves for about $3 a barrel. YPF, a privatised Argentine oil giant, has gobbled up Canada's Bitech, and paid less than a dollar a barrel for its reserves. And these were all proven reserves. That's why I asked the question "Which companies are ripe for picking, i.e. a buyout?" We ought to be looking for those companies that are selling for less than the value of their proven reserves. In this regard I will be contacting my firm's oil analysts on Monday to see if they have any screens they can run which will provide us the information we are looking for. Best, Joe

To: Rod Copeland who wrote (14)	12/6/1998 12:22:00 PM
From: Ed Ajootian	Respond to of 350

Dr. Rod, Thanks for the psychoanalysis! I think you hit the nail on the head w/me --- my style does not fit well with this sector. I would gladly pay double the price to buy a share of an oil stock than presently, if I knew what the commodity price environment was going to be a year from now. Looking back over the last several years, I made plenty of money buying and selling O&G microcaps when oil was $20 a bbl. I have no interest in buying a stock on the hopes that, with some favorable market forces, the commodity that the company is exploring for will come back up to it "equilibrium" price. That is not what I am in this for. All I wanna do is drill some holes and see if I get lucky, man. That's what it all comes down to. I don't give a rat's ass about what the Saudi's are doing or what the Venezuelans are doing.