When I became interested in the Bakken a couple of years ago, I was trying to figure out how to track information. I could have done it on a "Word" document but that just didn't work.
I had some experience with website development in a previous life, and I thought maybe HTML would be a great way to help me keep track of the Bakken.
"Blogger" application allows one to control who visits the website, and I could have kept the site completely private, or required a password to access.
But I thought it would be rewarding to open the site to any who might share an interest. The site was supposed to be educational only. I had no plans to introduce "investing" into the site.
But it didn't take long to realize that for me it was impossible to talk about the Bakken for any length of time without talking about investing. And so there's a fair amount of investment talk on this site. I try to make sure such talk is clearly identified as "investment" talk.
My readers have made all the difference in the world.
As an example, here's just one little piece of trivia that I would have missed had it not been for a reader. I had not looked at KOG's key financial statistics for quite some time until someone pointed out that KOG's price / earnings ratio (P/E) was 400. That's incredible. Ridiculous? Maybe. But I had long lost the bubble (no pun intended) on KOG's P/E. So, it was nice to have a reason to go back and look at KOG's key financial statistics.
I was blown away! KOG's forward P/E for the year ending December 31, 2011 (that's just ten months from now) is 15. A forward P/E of 15. Money in the bank.
It's Friday night, baby,
Get ready, set, go ...
You look better than money in the bank...
I met a man who invented a money machine...
He said he would give me the machine
If I gave you up...
I just looked him in the eye
And I said no thanks.
You look better than money in the bank.
[Note: this is not a recommendation; it's just a bit of fun on a Friday night.]
According to CapitalIQ, KOG's P/E is currently 15.37x for FY2011 and 8.05x for FY2012. By comparison...
ReplyDeleteBEXP:
FY2011: 31.19x
FY2012: 20.08x
FY2013: 15.41x
OAS:
FY2011: 32.01x
FY2012: 21.32x
FY2013: 7.98x
AXAS:
FY2011: 23.53x
FY2012: 15.03x
CLR:
FY2011: 28.15x
FY2012:22.32x
FY2013:18.17x
FY2014:15.84x
NFX:
FY2011: 15.09x
FY2012: 11.96x
FY2013: 11.23x
FY2014: 10.80x
Of course, I think TEV/EBITDA or TEV/Unlevered FCF and CAGR ratios provide a better picture.
Thank you, thank you.
ReplyDeleteSome incredible opportunities out there, aren't there?
You are correct; many better ways to measure value than P/E. P/E's don't make a lot of sense for growth companies.
I posted the KOG/15 mostly as tongue-in-cheek, as a lark, since someone had sent a comment into me suggesting that KOG's current P/E of 400 was a joke and that this was all a bubble.
Who knows? But I think analysts are not factoring in how many wells some of these producers are going to be able to get into one section in the better Bakken locations. The Bakken is new for everyone.
USGS estimates 5 billion barrels recoverable oil (+/- a few billion) from the Bakken; Harold Hamm estimates 24 billion.
As all these wells come on-line, CAGR will be very, very interesting.