EPEX for the BTS Portfolio
I bought this one last Friday at 5.05, and will be my oil+gas play for 2002.
I expect the cost of oil to rise in the coming months as OPEC will be cutting production and the economy starts to pull out its recession.
I think now might be the time to get into some energy plays....have some others i,m looking at also.
Natural gas prices have been relatively flat so far in early winter, but that can change real fast, as it is colder then a well diggers asre here in Mich LOL!
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Edge Petroleum Corp. (NASD)
Sector: Energy Industry: Oil & Gas Operations
Edge Petroleum Corporation, organized in 1996, is an independent energy company engaged in the exploration, development and production of oil and natural gas. The Company conducts its operations primarily along the onshore United States Gulf Coast, with its primary emphasis in South Texas and Louisiana where it currently controls interests in excess of 90,000 gross acres held under lease or option. In its exploration efforts the Company emphasizes an integrated geologic interpretation method incorporating 3-D seismic technology and advanced visualization and data analysis techniques utilizing state-of-the-art computer hardware and software. The Company has two wholly owned subsidiaries: Edge Petroleum Operating Company Inc. and Edge Petroleum Exploration Company.
The Company's estimate of proved oil and natural gas reserves, as of December 31, 2000, was 25.4 Bcf (billion cubic feet) of natural gas and 720 MBbls (thousand barrels) of oil or about 29.7 Bcfe (billion cubic feet equivalent). The Company's average daily production for 2000 was 17.1 MMcfe (million cubic feet equivalent) per day as compared to 18.6 MMcfe per day in 1999. At December 31, 2000, the Company's average production was 20.6 MMcfe per day.
Texas
The Company's activity in the South Texas Frio-Vicksburg Trend covers approximately 600 square miles and spans parts of Brooks, Starr, and Hidalgo Counties in South Texas. The Company's average working interests range from 100% in the Santellana area to 22.5% in the Encinitas area. There were three wells drilled in this trend in 2000. At year-end 2000, Edge's net production from this area was approximately six MMcfe per day. The focus for this area will be deeper drilling in the Vicksburg formation. Two wells are currently planned for this area in 2001.
52-Week Low
on 27-Sep-2001 $4.01
Recent Price $5.20
52-Week High
on 2-Jan-2001 $10.00
Beta -0.69
Daily Volume (3-month avg) 33.8K
Daily Volume (10-day avg) 39.0K
Stock Performance
52-Week Change -47.3%
52-Week Change
relative to S&P500 -40.1%
Share-Related Items
Market Capitalization $48.4M
Shares Outstanding 9.30M
Float 6.80M
Dividends & Splits
Annual Dividend none
Last Split none
Per-Share Data
Book Value (mrq) $6.44
Earnings (ttm) $1.49
Earnings (mrq) $0.05
Sales (ttm) $3.65
Cash (mrq) $0.22
Valuation Ratios
Price/Book (mrq) 0.81
Price/Earnings (ttm) 3.50
Price/Sales (ttm) 1.43
Income Statements
Sales (ttm) $35.4M
EBITDA (ttm) $25.1M
Income available to common (ttm) $14.4M
FINANCALS:
REVENUE
Quarters 1998 1999 2000 2001
MAR 3,786 3,542 3,811 11,523
JUN 3,849 4,189 4,683 8,045
SEP 3,981 3,056 5,588 6,181
DEC 3,847 3,699 9,692
EARNINGS PER SHARE
Quarters 1998 1999 2000 2001
MAR 0.080 -0.040 0.040 0.670
JUN 0.010 -0.030 0.020 0.310
SEP -0.050 0.010 0.200 0.050
DEC -1.970 -0.360 0.460
Totals -1.930 -0.420 0.720 1.030
BALANCE SHEET:
Cash & Equivalents: $6.40 Short-term Debt: $0.00
Fixed Assets: $51.00 Other Liabilities: $0.80
Intangibles: $0.00 Total Liabilities: $4.10
Other Assets: $0.40 Total Equity: $59.30
Total Assets: $63.40 Total Liabilities & Equity: $63.40
Valuations:
Investor Sentiment: $11.50 $6.35 123.3%
Analysts' Target: $9.00 $3.85 74.8%
StockSelector Value: N/A N/A N/A
Intrinsic Value: $24.81 $19.66 381.8%
Industry Value: $14.26 $9.11 176.9%
PEG Value: $16.00 $10.85 210.7%
Present Value: $9.34 $4.19 81.4%
RATIO COMPARISON
Valuation Ratios Company Industry Sector S&P 500
P/E Ratio (TTM) 3.50 9.11 17.42 32.06
P/E High - Last 5 Yrs. NA 61.26 60.88 50.96
P/E Low - Last 5 Yrs. NA 7.29 9.09 17.44
Beta -0.70 0.66 0.50 1.00
Price to Sales (TTM) 1.43 1.38 1.44 3.86
Price to Book (MRQ) 0.81 2.09 2.94 5.66
Price to Tangible Book (MRQ) 0.81 2.26 4.34 9.01
Price to Cash Flow (TTM) 2.07 5.45 9.27 21.56
Price to Free Cash Flow (TTM) 8.90 18.28 25.10 37.17
Analyists:
Average Recommendation: Strong Buy Average Target Price: $9
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Current Analyst Summary 1 Week Ago 1 Month Ago 2 Months Ago 3 Months Ago
Strong Buy 2 67% 2 2 2 2
Moderate Buy 1 33% 1 1 1 1
Hold 0 0 0
Moderate Sell 0 0 0
Strong Sell 0 0 0
Firm Analyst Recommendation 12-month Target
Credit Lyonnais Brad Beago Buy $9
Dain Rauscher Wessels Raymond J. Deacon Buy -
Raymond James Wayne W. Andrews Strong Buy -
RBC Capital Markets (Canada) Raymond J. Deacon Buy/Aggressive -
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Summary:
I believe EPEX is trading at substancial discount to its peers. With it trading at 2 1/2 x earnings less then its peers, and trading at 8.90X free cash flow with its peer at 18.28X free cash flow, and book trading at almost 3 X its peer average. The comapny is growing the top and bottom line, and represents a good value and growth play in the oil and gas field.
The company has settled a law suit and will take a 3.5 million charge in the 4th Q, this i believe is already priced into the stock.
Target 12 months: 9-11.00
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