RE: RE: RE: Another 52 week low Since horizontal drilling is a new process the people who determine the 2P reserves are being very conservative with their reserve assignments for a horizontal well. LEG drilled 100 succesful wells last year and their 2P reserve estimates only went up by 10M BOE. Disregarding sales and acquisitions etc. the 10M increase only averages out to 100,000 BOE per well. Companies drill a horizontal well assuming they will get 200 to 250,000 barrels from a well. The conservatism in the reserve reporting makes for high finding and development costs, but if a more realistic reserve figure is used the F+D costs would be in the $20 per BOE range.
I believe this conservative reporting combined with a very skittish market will make for a tremendous bargain in LEG. Every setback some companies stock gets knocked down to a tremendous bargain price. LEG looks like it is on its way to being a tremendous bargain. LEG is a bargain now but where is the bottom?