Short adjusted reserve life of 5.2 years for oil combines with long-life index of 14 years for natural gas to yield an average life index of 7.8 years. The overall short life is matched by unlevered cash flow multiple, EV/Ebitda, of 4.3 years that is lowest of peers. Present value of 30% for natural gas and 36% for oil leaves 34% for the remainder, mostly aluminum. Cash flow at high aluminum price appeared strong for the quarter just reported while income was nil after discretionary writeoffs and hedging loss.
Original Publication Date: February 14, 2006
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