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Gold/Mining/Energy : PEL - Purcell Energy -- Ignore unavailable to you. Want to Upgrade?

To: Richard Saunders who wrote (62)	4/25/1999 2:27:00 AM
From: mike smith	Read Replies (1) \| Respond to of 165

Richard, thanks for the kind words regarding my prior postings on other threads. Unfortunately, I don't follow some of the companies you mentioned but I will let you know if I come across them. In reading a lot of the posts on various threads over the past year or so I have come across a lot of valuable information regarding an assortment of oil and gas companies (primarily juniors). It would be nice if all of this information could be collected and put into a data base so that we (the potential investors) could compare the different companies using a bunch of common parameters. Some of the more meaningful parameters to compare the companies with each other would be: Price to Cash Flow; Enterprise Value per Proven BOE ; Debt to Cash Flow ; Year over Year growth in earnings, cash flow and production; current daily production, etc. This analysis would help to key in those juniors that are truly undervalued and weed out those stocks that overhyped (ie. trade far above underlying value) I firmly believe that many of the medium to senior oil and gas companies have already experienced some turnaround in stock prices from the recent light oil price rebound. However, with the uncertainty that surrounds a prolonged recovery, I think folks are still nervous about jumping into junior oil and gas stocks just yet. I think if the price of oil can hold until the fall that people will gain more confidence and start buying up juniors at that time (hopefully institutional buyers will be back !!!) My point is that now is a great time to jump into the juniors while they are still relatively quiet. If you are worried about oil prices then go after juniors with a gas exposure (ie. Crownjoule, Tri-gas, Velvet, etc.) The nice thing about buying companies that are seriously undervalued these days is that they either go up on their own or they become a takeover target at which time their value will also go up. Using the parameters that I discussed above an example of a stock that appears to be undervalued right now is Crownjoule. For instance: Price to current year cash flow is less than 3 to 1, Their price to last year's cash flow is right near 3 to 1, their enterprise value per proven BOE is at approximately $9 - not bad given they are all gas and should expect netbacks this year in the $1.60 per mcf or $16 per BOE range , and their debt to cash flow is at 0.5 times. Based on these basic but meaningful calculations I think this company is undervalued. This is the kind of analysis which most of the research guys at the major brokerages do (ie. Nesbitt, Yorkton, Canaccord, Wood Gundy, etc.) which would be of great benefits for the guys like us who don't have a lot of time to do. Anyway, sorry I'm being so long-winded but I had a little extra time on my hands and thought I would throw some thoughts out. I hope that a couple of things happen over the next while on these threads: 1. That a lot of the stocks people are promoting are backed up by thourough analysis' rather than rumors and 2. That someone out there develops a comprehensive data base that compares a multitude of juniors over some common parameters so that we can quickly weed out the overvalued companies and focus in on those which appear to be undervalued. Richard, which junior companies are you currently following which you feel are undervalued ??? I would be interested in how you value these and where you think the upside is ??? Regards, Mike