Help with Energy Valuations...

[The Big Ease]

looks like i have missed quite a few rippers in the last 3 months:

bow, sxp, rpm et al have been nice little earners for a few of you.
i reckon its time i pulled my finger out and understood energy companies better, so what better place to start than with the good folk at ST.

What kind of framework can i use to evaluate a company's prospects?
The way i see it, a company can either be:

exploring
verifying the nature of the find (quality, purity, composition etc)
building infrastructure to produce (extraction, transport etc)
producing and selling


So how do you go about it?
Do you start with what you think theyve got in the ground, capacity to fund production of (x per annum*market price) less cost of production and work your way back from there?

Do you just go with whats hot in the market?

would appareciate any links to articles, books to read etc.

thanks in advance,

TBE.

[bermuda]

looks like i have missed quite a few rippers in the last 3 months:

bow, sxp, rpm et al have been nice little earners for a few of you.
i reckon its time i pulled my finger out and understood energy companies better, so what better place to start than with the good folk at ST.

What kind of framework can i use to evaluate a company's prospects?
The way i see it, a company can either be:

exploring
verifying the nature of the find (quality, purity, composition etc)
building infrastructure to produce (extraction, transport etc)
producing and selling


So how do you go about it?
Do you start with what you think theyve got in the ground, capacity to fund production of (x per annum*market price) less cost of production and work your way back from there?

Do you just go with whats hot in the market?

would appareciate any links to articles, books to read etc.

thanks in advance,

TBE.

Hi Big Ease.
Just read the QGC file and then have a look at VPE BOW and RPM and a few others.

You can do the numbers in your head.

Hardly even need a pencil.

Cheers

[airedale]

"Hardly even need a pencil." I like that,Bermuda. lol:)

[AMR]

Bermuda, how do you tell if the management of a company are pig-in-trough types or genuine aussie battlers down on their luck?

[The Big Ease]

Hi Big Ease.
Just read the QGC file and then have a look at VPE BOW and RPM and a few others.

You can do the numbers in your head.

Hardly even need a pencil.

Cheers

ahh cheers.

just finished reading qgc and this is what i have picked up:

Resources
1p > 2p > 3p > available acreage
needs to be certified before sale. time to certification = variable.
close to gas pipeline = good
close to power station that you have a contract for = blardy good
gas flow above +1m cf per day = good

surprisingly little in the way of financial evaluation in the thread. can anyone avert my need to reach for a pencil?;)

[JBmurc]

whats you guys view on valuation on BCF in ground value I know that JC in his OIL&GAS weekly belived it was round 5 mill per BCF back when US gas was $7-$8 I know the value all depends on location costs pipelines infurstruce .etc
-Personal With a US BCF currently worth 12mill gross I'm conservatly working on 6mill nett value to companys Mktcap- so say with STX which looks likely to have reserve upgrading closer to 100BCF by late this year from there Rayburn discoverys,so there company currently looks well undervalued at 100mill Mrkcap ?(not including bbl cashflows)

-Unlike STX which has world class infurstruce near by to there Discoverys ,Values per BCF to say LMP which as no infurstruce nearby would have to be alot lower how much?? IMHO at least 3mill per BCF? so if LMP call bring up Gas reserves of 100Bcf =300mill Mrktcap ???