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Gold/Mining/Energy : Swift Energy (SFY) -- Ignore unavailable to you. Want to Upgrade?

To: Mark who wrote (811)	5/29/1999 10:43:00 AM
From: FloydP	Read Replies (1) \| Respond to of 1602

Natural Gas Futures closed at $2.38 basis July yesterday. A good look at "why" was published this morning in the story on CBS Marketwatch. Have any of you guru's done the math on the impact on Swift's earnings based upon this high and continuing to stay high NG price. This has got to be a boost to the possibility that Swift will be a $20 number by the end of summer. Love to hear your inputs. Staying long and loving it. Floyd

To: Mark who wrote (811)	6/20/1999 12:30:00 PM
From: Mark	Read Replies (1) \| Respond to of 1602

Reasons to be optimistic....... 1) Oil prices have recovered substantially and there is a good chance that they will go further. Based on the last couple of quarters, SFY's output is now 33% oil, which means that they should be benefitting from the price rises. 2) NG pricing has fallen back a little in the last week because the AGA figures are still high (there is still a lot of NG in storage). However, pricing in the futures market for the end of the year are looking good. Furthermore, with oil currently strong, and the cost ratio of O:NG presently around 7.5 ("trend" suggests that 6.5 should be a more realistic number) it seems likely that NG will increasingly become the fuel of choice for those with dual-fuel set-ups (once existing supply contracts unwind). Together with the effects of low drilling beginning to filter through the industry, it seems likely that NG will become scarcer and prices will continue to strengthen. 3) The analyst ratings on SFY have been steadily improving. In addition to the "high profile" upgrades to "buy" last month, one analyst who had a "hold" on the stock appears to have stopped coverage. The net effect is that the average rating is now better than 1.9, with momentum suggesting the average will continue to improve. 4) The analyst ratings on earnings are quietly improving all the time. In the last 6 weeks, the average estimates (First Call) have changed - Q2 0.11 >>> 0.23 '99 0.68 >>> 0.90 '00 1.18 >>> 1.38 The momentum is strongly upwards (and should continue upwards as long as Oil and NG prices continue to hold or strengthen). The revised numbers are getting close to my target figures of $1 for '99 and >$1.50 for '00. Message 8300061 5) The peculiarities of PV-10 accounting mean that the capital hit that SFY to took last year to write down reserves will reappear (subject to commodity price strength) on the future earnings line as a reduction in dd&a. In effect, some $50m will flow through to earnings over the next several years. 6) By the time we get the Q3 figures (about 4 months time), we will be a year past the point when the write-down hit last year. All of the share data screens showing trailing twelve month earnings will then begin to reflect the real earnings situation (free of the one-off charge). We will then also get a PE ratio again! 7) The New Zealand drilling will likely yield results at around the end of the year. This isn't factored into the stock price and could give another positive hit if things work out well. Checkout the Yahoo! msg at - messages.yahoo.com All things considered, we stand a good chance of having a very profitable next 12 months...... Mark