PAN ANDEAN RESOURCES - EL DORADO.......HUGE FIND

All this was predicted by the Institutional Trader [see below] -
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AIM listed Pan Andean [PRE] - Share of 2001 ?! (PRE)
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CityTraderBoy - 31 Dec'00 - 15:41 edit





Subject: AIM listed Pan Andean [PRE] - Share of 2001 ?!


Message: PRE - Share of the year 2001 ?! London's most undervalued E&P play ?!


Message: PRE's Net Asset Value equates to at least 0.75p !!!!


Opinion: Strong BUY


Post rating: (average view of 39 users)


Message: Pan Andean Resources PLC [PRE] are extremely cheap !?
Institutional Trader explains as follows :-
In broad numbers the Institutional Trader believes it reasonable to attribute a value of $1 per
thousand cubic feet (mcf) discovered, given the good location 25km from the
growing city of Santa Cruz and on the 1 billion cubic feet daily (mmmcfd)
pipeline to Brazil. This may seem aggressive given current gas prices
(about $1.60 net per thousand cubic feet), but remember that real gas prices
tend to rise over time because of the intrinsic green, infrastructural and
economic advantages over oil-based substitutes. At present PRE must be getting about $9 in the USA, which equates to about $54 per oil barrel, or roughly
twice the recent oil price. Even with PRE's current 10%, a 600 bcf discovery
would be roughly worth $60million.

There was also good condensate flow (a high value sweet light oil) which
it is probably reasonable to value at between $10 to $15 million.

PRE's other producing properties in Bolivia at Monteagudo must be worth at least $12 million, with considerable additional deep gas potential.

PRE paid over $15 million for the producing US interests (Endeavour and ERT)
in early 2000 when the US gas price was about $3. A production hit has
boosted oil output. Debt is now virtually paid off. It is believed that this is
worth at least $30 million.

So PRE now has a Net Asset Value of about $100 million. With a
current share price of only 25-26p, and 87 million shares in issue, PRE trades at about a third of NAV and only 40 months cash flow.
However , you look at it PRE are extremely undervalued !
In the view of the Institutional Trader the Market will wake upto this fact in the new year [plus the proposed next drill[s] , early next year] and dramatically re-rate the shares !
ENJOY YOUR XMAS IN THE SAFE KNOWLEDGE THAT YOUR PRE SHARES SHOULD FLY EARLY ON IN 2001 !!
Cheers ,

Institutional Trader .
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Happy New Year to all the real PRE "Boys & Girls" - Here's to a prosperous 2001 !!!!
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