Energy Prospectus

The NEW for 2015: Sweet 16 Growth Portfolio spreadsheet has been posted under the Sweet 16 Tab:
> Tab 1 of the spreadsheet is a summary of the EPS and CFPS forecasts for each company
> Tab 2 shows my Fair Value Estimate compared to First Call's Price Target for each company as of 1-2-2015

Also under the Sweet 16 tab are my updated forecast models for the three new companies: BTE, FANG and ROSE

I fall into the camp of not being totally secure in reading financials.

re: Rose, I was looking at Yahoo Key Statistics and see shown Total Debt/Equity (mrq): 128.66 Isn't that high? Is it balanced out by something else?

Also shown is Levered Free Cash Flow (ttm): -801.55M Wasn't sure what to interpret from that.

http://finance.yahoo.com/q/ks?s=ROSE+Key+Statistics

I was also looking at OAS Key Statistics which are even higher.

http://finance.yahoo.com/q/ks?s=OAS+Key+Statistics

NEVER use Yahoo for stuff like this. Go to the SEC filings and look at the actual balance sheet.

For ROSE (in $thousands):
$ 207,750 Current Assets
3,702,136 Fixed Assets
35,384 Other Assets
------------
$3,945,270 Total Assets
===========

$ 350,222 Current Liabilities
2,460,726 Long-term Liabilities
1,484,544 Equity
-------------------
$3,945,270 Total Liabilities + Equity
===============

So, at 9-30-2014 ROSE's Debt/Equity Ratio was 1.89/1. Anything under 2/1 is very good.

It is VERY IMPORTANT to understand that Fixed Assets are recorded at cost less accumulated DD&A. The value of those assets are much higher today.

When looking at an E&P company, EBITDA (Earnings before Interest, Taxes, Depletion & Amortization) is much more important. This gives you a better idea of the company's ability to service their debt. Most companies spend a lot of time on quarterly reports pointing out their EBITDA and Liquidity for good reason.

I know SEC reports intimidate a lot of investors, but you need to have a basic understanding of the three required financial statements (Balance Sheet, Income Statement and Cash Flow Statement). Cash Flow From Operations is the most important, and why I stress it so much here.