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YPF S.A. Message Board

  • analyst112 analyst112 Mar 25, 2011 2:00 PM Flag

    Here is the YPF story

    If you like oil and gas stocks, you will love YPF, a $17 billion market value company.
    YPF has 38% of Argentina production and most of the drillable land concessions and they are starting to drill. The recent discovery at The Vaca Muerta and Los Molles shales is typical. YPF estimates that the shale gas resource base in the Neuquen is over 250 trillion cubic feet (Tcf). Argentina’s annual gas consumption is 1.5 tcf and its proven, documented, reserves are about 15tcf so the discovery is far more significant for Argentina than the Barnett was for the U.S.

    This field alone is worth 50% of the stock price with conservative assumptions. YPF has only scratched the surface of its vast acreage. They are the PBR of Argentina. Reserve additions will show up in reserves numbers and we will see NAV much higher than the recent stock price. To be more precise, 250,000,000,000 billion MCF (250TCF) in the ground is worth a minimum of $1/mcf. You can sell LNG for $5/MCF and it would cost $$1/MCF to get into liquid. If you just use $.50/MCF in the ground, the reserve is worth $125 Billion. The market cap is $20B. Just this find is worth 6X the current market cap.
    This was an IPO for all intents and purposes as the stock was illiquid in the U.S. Repsol sold 26 million shares yesterday so they could invest in Alaska. While it traded somewhat in the U.S., only 1.3% of the stock was in public hands. Repsol owned 81.5%. Peterson bought shares from Repsol for USD$39 in 2008 when oil prices were low and U.S. private investors purchased 15MM shares in Nov. 2010 at $42.50. The gas discovery took place in Nov. 2010. YPF has 1 billion barrels of proved BOE worth $30 billion. Try to find another major integrated selling below the value of its reserves. All the downstream is free-1700 gas stations, refineries, gathering systems as well is all unproved acreage, and the latest gas find.

    The company states they will pay out 90% of a.t. income. The dividend has no withholding tax in Argentina. While the April dividend has not been set, I believe it could be $1.70 as they are earning $4/shr and that would be a 85% payout. That means the stock is yielding close to 9% after it pays this dividend in the next month. This offering creates liquidity with 9% of the company now trading publicly--mostly in the U.S. No U.S. analyst has written on YPF. That will change very soon. The sloppy offering drove the stock from $50 to $42 in the last 2 weeks. It will back at $50 very soon.
    http://www.sec.gov/Archives/edgar/data/904851/000120864611000133/c104463.htm

    This is a perfect storm value and timing.

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YPF
29.410.00(0.00%)Apr 20 4:04 PMEDT