GREY:ROAOF - Post by User
Comment by
Darilonon Aug 06, 2007 12:34am
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Post# 13204814
RE: Chyanne Fickes #2 Top Pick
RE: Chyanne Fickes #2 Top Pick<>
The if game is a great game, but it goes both ways. If Shelley produced 10kboe/d at $65/boe due to slightly lower quality, how does that compare with 5kboe declines at $70/boe? If Ptarmigan comes online and adds yet another 10kboe what does that do to cash flow? Oh, I see, cash flow in '08 looks like it will be up rather dramatically - around 50%?
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Well, it sure is a good thing that Huntington came up so huge. An extra 50kboe/d from there should offset declines from the previous producing properties as well as take care of paying the taxes - while simultaneously adding capex costs that further put off taxable status.
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A 3-4x CF multiple is too high? It is a status that is almost unheard of. Oilexco is a money making machine right now and it's likely to keep growing at around 50% per annum for the next 2-3 years. After that it might be in a bit of a stasis situation unless they ramp up exploration and development with their massive cash flows. Look, a 3-4 CF multiple is at the low end of the spectrum, not only for the sector but within the entire investment community. For a company with rapid growth a higher multiple is warranted.