Comments on: Klarman Energy Pick Runs Into Credit Crisis Buzzsaw

By: The Enlightened American » Portfolio Performance +6.8% Through April 2009

The Enlightened American » Portfolio Performance +6.8% Through April 2009 — Mon, 04 May 2009 19:53:59 +0000

[...] Klarman Energy Pick Runs Into Credit Crisis Buzzsaw [...]

By: peter

peter — Fri, 01 May 2009 02:08:50 +0000

Plan,

Did you figure out the tax consequences for foreigners?

By: PlanMaestro

PlanMaestro — Wed, 22 Apr 2009 17:26:19 +0000

Well I suppose you are mortgaging the family silver to buy BBEP.

A secondary point: With a 30% FCF/Market Cap Yield and no maturities it is pretty clear that the solvency and liquidity issues are WAY overblown. 97 M is the recent released released free cash flow with maintenance capex, and 130 M is the free cash flow with cut to the bones capex.

Dividend/Distribution cuts can be great buying opportunities when the fundamentals are intact.

twitter.com/PlanMaestro

By: Neil

Neil — Wed, 22 Apr 2009 00:51:33 +0000

I guess I’ll have to do my own work then (no cheating )

By: Davy Bui

Davy Bui — Tue, 21 Apr 2009 22:27:29 +0000

Thanks for the added comments, guys!.

Plan, we’re on the same page as far as energy supply destruction. I’ve posted a bunch on that lately and would also note that in the review of the 4 major bear markets of the 20th century, oil emerged as the largest sector in every case except 1921, where it was the 2nd largest. At the end of the day, we still live in a physical world, not a virtual one, and you still have to move stuff and do work.

Neil, I do have an intrinsic value number for the stock but for reasons to be announced later, I’m not going to divulge it.

By: PlanMaestro

PlanMaestro — Tue, 21 Apr 2009 16:08:50 +0000

And if you want to know more about the company. They are presenting today at the IPAA

http://www.vcall.com/CustomEvent/conferences/IPAA/20090420/agenda.html
http://twurl.nl/vhpqte

By: PlanMaestro

PlanMaestro — Tue, 21 Apr 2009 16:00:40 +0000

It is difficult ot put an intrinsic value on cyclicals. The estimates I have seen is that the company at the moment is valued between 30 and 45% of net asset value including hedges and ONLY PROVED reserves.

Also the Yield FCF/Market Cap this year at current prices is around 30% and it should increase next year because the hedges are much better for 2010 and 2011.

However, the main reason to buy this stock is that it has an inflation protected return for the next 3 years and you just can sit and relax and wait for oil and natural gas prices to explode!

Oil and Nat Gas prices are currently at supply destruction levels. See rig counts or the efforts of OPEC to increase prices.

By: Neil

Neil — Tue, 21 Apr 2009 12:10:51 +0000

Davy,
What’s your estimate of BBEP’s intrinsic value? I ask to see if it’s worth investigating further.

Cheers, Neil

By: Jae Jun

Jae Jun — Mon, 20 Apr 2009 18:55:08 +0000

Thanks for the heads up. Will have to take a look at this one.

By: Davy Bui

Davy Bui — Mon, 20 Apr 2009 17:25:57 +0000

Lots of additional insight on the yahoo message board:

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_B/threadview?m=te&bn=53738&tid=1921&mid=1921&tof=1&frt=1