Value Microcaps Motherboard

[researcher59]

Marvelmeister: PKZ

I think the article is fairly accurate with regard to PetroKazakhstan's reserves being about 7+ years, however they are increasing their reserves steadily, with a 180% replacement of production for 2004. In other words they went from 6+ years of reserves to 7+ over the last year, even after production. Most of the majors are struggling with declines in their reserves, and the giant Royal Dutch Shell has several times substantially reduced their reserve estimates. Furthermore, PKZ has excellent prospects for further exploration.

However the YTD stock performance had badly lagged the sector, up only about 1% versus roughly 20%+ for most of the majors. I think the stock should rally nicely ahead of their Q1 earnings report due out in early May. I hold both shares and call options on PKZ and think the stock is undervalued with a trailing PE of about 6.