Replies to post #16 on Double Eagle Petroleum (DBLE)

[tr8dervic]

DBLE 10.50 + 1.08, might have more room to run. The main reason is they hold 70,000 net acres in the Niobrara play. Samson,SSN recently sold 24,000 of their Niobrara acres to CHK for a little over $3,000 per acre or $74 mil.

A few days ago Cnooc agreed to buy a 1/3 interest in CHK's 800,000 Niobrara acres for 570 mil cash upfront and funding 2/3 of drilling and completion costs for another 697 mil thru 2014. That values a net 267,000 acres to Cnooc at $2135 per acre upfront and over $4700/acre overall.

It remains to be seen whether or not DBLE's acreage is comparable to SSN's and CHK's, but with a current EV of ~190 mil at 10.50 per share and the Niobrara alone possibly being worth 210 mil at 3,000 per acre or more, one can see why this hot streak DBLE has been on may have more room to run.

Given their other producing properties and 90+ BCFE reserves + 28 mil positive cash flow or about 2.50 per share, I think that DBLE could easily reach it's old highs of 20+ in the next few months. (Or get bought out at 15+ before that).

All imho and good luck,

Vic

[OilStockReport]

Low price-to-sale ratios w/ this one...

Double Eagle Petroleum (DBLE) – As with any oil company, there is a necessity to replace its reserves while producing. The cost of exploration and acquisition is high, which is some of the reasons for narrow industry margins. As of the time that this article was written, the price to sales ratio was only 2.0. The industry is recorded at 5.44(numbers vary slightly according to source).

One year sales growth is 22%, and this is similar to the 5 year average. Of course, quarter over quarter sales growth between years is down roughly 30%, which is disconcerting. With only one analyst covering the stock, it is hard to get a good read on the future earnings prospects. As well, there is a lot of fluctuation in this company as sometimes they use derivative instruments to hedge, and other times they don’t.

Based on a simple price to sales ratio and increases in sales between fiscal years, this could be a good small cap oil play.