Monica Verma

6 Comments

    • Seismic Data Stocks Dawson and CGS Veritas: Stability in a Volatile Sector [view article]
      What do you think of those First Growth Capital guys? FGC on the TSX Venture
      (they use the Input/Output technology)       Oct 10 02:19 PM
    • National Fuel Gas Heating Up [view article]
      It's great to see someone else looking into these guys. Saw your posting as well and I guess we were thinking along the same lines.

      The last response did seem to indicate that management was getting a little annoyed with the correspondence. We'll see in the coming weeks.

      I do think that as more information becomes available, NFG will bump up for the shallow reserves. The problem is that the N/S report is only for the shallow. So using the deep valuation of its peers, the stock could have a great deal more of embedded value. It may be some time coming...

      I did a little survey of a sample players in the area (which I'm happy to send over if you like), looking at capex, reserves, planned wells, exisiting wells, etc. Just to give you a sense of how slow they are going, companies like Range Resources (RRC) and Equitable (EQT) are devoting almost 3x the amount of capex to the region. NFG has one shale well while Cabot Oil and Gas (COG), I think, has around 100. This is kind of interesting given the fact that NFG is the incumbent player in the region.

      Bottom line, I see a lot of similarities between NFG and Questar (STR) at the beginning of its transformation...the STR story has turned out really well, so let's see what NFG can do to create more value for shareholders.       Sep 21 10:26 AM
    • Chesapeake Energy: Q2 Earnings Review [view article]
      There are a few other salient points to add to the CHK story. First, it announced a partnership/sale of its shallow Appalachia assets in what looks very much like a VPP set-up. This helps with cashflow and funding of capex while retaining operational and hedging control, two things at which the company excels.

      Second, the company is issuing more convertible debt. I am always surprised by the negative reaction to this for a company such as Chesapeake. Convertible debt markets are currently attractive and there is no guarantee that credit will be so readily available at such levels in the next few years. The company has capitalized on this by issuing long dated convertible debt to buy major asset positions and now to accelerate drilling. As you say, they truly are a drilling machine with strong deep drilling capabilities. I believe it likely that CHK will be in a strong enough position to buy them back prior to conversion.       Aug 20 11:45 AM
    • Chesapeake Energy: Value is the Gas in the Ground [view article]
      I agree with you that CHK is a great one to own. In fact, I'd say that now is the best time for an investor to get in. 1) yes it looks like a manufacturing company since it hedges a majority of expected production; but the company is still in the phases of delineating exactly how much gas it has and that number is growing every quarter
      2) it is the largest driller in the US and just beginning to realize that it needs to seriously ramp up production to increase cashflows to fund capex and to really just deliver on its promise of reserves
      3) it is an expert deep driller meaning it has positions in and can effectively drill the BIG wells; a company that can target wells with >5 Bcfe of reserves behind it at a fairly good cost is one to invest in
      4) management just said it was open to an MLP for midstream assets, rigs/services or its mature Appalachia assets. this is perfect for a company the size of CHK b/c it has a huge inventory to drop down into the MLP for years to come.

      I believe that investors are simply tired of the company not ramping its production up quickly enough and therefore assign a discount.       May 08 10:28 AM
    • GS and MS Dominion Buyout: Liar's Poker [view article]
      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!       Jan 25 11:50 AM
    • GS and MS Dominion Buyout: Liar's Poker [view article]
      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. Jan 24 04:33 PM
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