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

To: SofaSpud who wrote (6099)	2/24/1999 7:58:00 PM
From: VisionsOfSugarplums	Read Replies (1) \| Respond to of 24925

REL - IMHO, apply that valuation, also using the $4.50 a boe, to every other oil and gas company and see what you come up with. Especially look at exploration companies - they're the ones taking bigger risks to find the oil and gas. Now also look to see whose finding costs are under $4.50 a boe - once you've done that, add $0.35 a boe for G&A to manage the company. Using these so called "reasonable" prices (and I haven't even included an interest cost or an amount to replace capital) - shareholders could pretty much expect squat as a return on investment (and under my scenario they would be taking all the risk). So why would they buy shares and how would the oil and gas companies finance themselves. The whole point to the REL takeover is that Dominion is getting proven, producing reserves, all the potential from the probables and undeveloped land, a team of people that work together, a TSE listing and price upside from the Cdn/US exchange ratio and oil and gas commodity pricing - at an incredibly cheap cost because REL has no bargaining leverage. There are a number of factors which have made this an incredible screw up for REL shareholders, but I still don't think I would call the buyout price "reasonable". It is, however, the kind of thing that can happen when you are in a weak position. And maybe that's what you meant by reasonable? Regards, t.