Message-ID: <5902015.1075855682664.JavaMail.evans@thyme>
Date: Mon, 21 Aug 2000 09:40:00 -0700 (PDT)
From: phillip.allen@enron.com
To: mac.d.hargrove@rssmb.com
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Mac,

 Thanks for the research report on EOG.  Here are my observations:

  Gas Sales 916,000/day x 365 days = 334,340,000/year
  
  Estimated Gas Prices $985,721,000/334,340,000= $2.95/mcf

  Actual gas prices are around $1.00/mcf higher and rising. 

   Recalc of EPS with more accurate gas prices:
  (334,340,000 mct X $1/mcf)/116,897,000 shares outst = $2.86 additional EPS 
X 12 P/E multiple = $34 a share


 That is just a back of the envelope valuation based on gas prices.  I think 
crude price are undervalued by the tune of $10/share.

 Current price 37
 Nat. Gas 34
 Crude  10

 Total  81

 
 Can you take a look at these numbers and play devil's advocate?  To me this 
looks like the best stock to own Also can you send me a report on Calpine, 
Tosco, and SLB?


Thank you,

 Phillip