UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: nonzerosum One star, 50 posts Old School Fool CAPS All Star Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 17  
Subject: UPL question/comment Date: 1/2/2012 3:18 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi guys,
Thanks for the rising star articles. Not sure where you want comments/questions, so I've copied the article comment here too.

On UPL: if they have such good cash flow, why the enormous issuance of debt? Long term debt is up about 5x over the last 5 years, while revenue and reserves are up only ~2x. So all that capex seems poorly allocated.

They spent $5.6B in capex over the last 5 years or so. Looking at PV10 below, that means that they increase PV10 by $0.50 for every $1 capex they spend. Of course, the low gas price takes much of the blame, but still... looks like they're on a hamster wheel.

Also, the PV10 in the last annual report is $3.5B based on a $4 price of natural gas. Using the current $3 value gives a PV10 of $2.6B which means the company is trading at a 73% premium to its proven 2010 value (do you have the 2011 number?). How come you feel they will go up?

Thanks,
tj
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Post of the Day:
TMFDeej's CAPS Blog

Activist Investors Unlocking Value at LSB Industries?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement