Monica Verma

GS and MS Dominion Buyout: Liar's Poker

couldn't agree more on that one. VPPs all the way- monetize that future cash flow! Or they could set up their own and just IPO those.

And yes, definitely a fun-to-read writing style!

GS and MS Dominion Buyout: Liar's Poker

Hi, While I understand your frustration at how comments made by GS and MS tend to sway the commodities market, I'm not sure I understand your valuation methodology in this case. P/E ratios tend to have less value than the NPV value of the reserves, right? So, back of the envelope, if we take 5000Bcf in proved reserves times an acquisition gas price of $3/Mcf, higher than the real players just b/c we both agree that they want to justify exisiting valuations on their books by having a market transaction, we get a proved reserve value of ~$15B. Add in the value of the Oil reserves (also using a conservative long-term price) and apply a 10% discount NPV methodology and you've got them still paying a slight premium but not as gross as it might seem, especially if there are other assets thrown into the mix as well.