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Range Resources Corporation Message Board

  • shortofaname_99 shortofaname_99 Feb 24, 2009 6:28 PM Flag

    RRC: Proforma EPS is a joke

    Abandonment and impairment of unproved properties should not be pro-forma'd out. This is a true expense on which capex is expended. Also, stock compensation is a real expense. RRC has true earnings power of $1. Put a 12x multiple, and this is a $12 stock. Ridiculous that it trades at a 30x multiple and 5x revenues.

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    • RRC should trade with an eye to NAV.

      Statoil paid CHK $5,000+ per net acre in the Marcellus, for a non-operated position. What does that tell you about RRC's 900k+ net acres?

      They have 15-20 TCF locked up in a project that is profitable at $4 NG. The Marcellus is the project to own. That's what this NG shakeout is teaching us. RRC has an enormous position. It's development is just beginning. Get in now.

      E&Ps don't trade based purely on EPS. Ultra Petroleum traded at 50x EPS for years. It was trading based on NAV - 12 TCF+ in Pinedale attached to a small company. Same concept here with RRC, except better individual well economics.

    • It is what it is: a $35 stock at present in AHs in the wake of its excellent Q Report, not what you as a short wish it would be. Looks like you've got a decision to make. In such situations, its best to deal with reality rather than to stubbornly hold on to a position moving against you.

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