Energy Prospectus

Re: Your thoughts. When one of your faves approaches your FV do you generally remove it from your recommendation list? It does seem to me that it makes sense for shareholders to sell a name with a 10-15% possible upside for one with possible 30%+ upside. I am guessing that most of us were not members the last time energy went through this type of cycle so we do not know your modus operandi. Your thoughts please.

Timing of what you buy or sell is totally up to you. However, it does make sense to harvest gains and move the money to companies with more upside. The smaller companies have more upside, because they are "off the radar" screen of Wall Street. Money managers with no oil & gas industry experience tend to invest in the larger more well-known companies.

Keep in mind that my stock valuations are likely to move higher since oil and gas prices are now well above the commodity price deck that I am using. Also, right now my 2022 forecasts are based on my "best guess" of what the companies will do. If their detailed guidance confirms my model assumptions, I will raise the multiples of operating cash flow used to value them.

Also, size does matter in this business and the "Elite 8" definitely have less risk.

MGY is the closest to my valuation, but none of its production is hedged. Q1 results could be "stunning".

ESTE is the smallest company, but it has some very strong investors and a team with a strong track record of success.

CRK has a lot of upside if natural gas prices hold up.

Got it, although the market looks like it didn't love este's latest announcement.

The "market" is very often wrong. Earthstone has a super high quality management team.
Often when a significant transaction is announced some investors bail because of the uncertainty.

I was in ETSE after their first deal and it fell to 8. It always seems to fall after a deal. This time I added and Im holding on with Oil pushing 90