Thursday, October 1, 2009

Portfolio Note: CEP @ $3.98 - Buy

Constellation Energy Partners (CEP) is a nat gas production company.

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From the 2Q conf call: the NAV of proved reserve was worth $312.4 million, while the current market value is $88 million. The calculation values reserves at about $2/mmBtu, so I assume it deducted production costs.

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From 10Q of Q2/2009, CEP hedged around 3/4 production at above $8.

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It generates $9 million free cash in 1H.

Known unknowns?

http://icecurtain.blogspot.com/

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