Re: Some stuff I bought last week
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You aren't even trying to value an E&P company which are different from other companies you might be looking at. Asset intensity is a measure of the % of capex used to maintain FLAT production, and is mentioned by some analysts, and XTO ranks well there. A quick and dirty way to figure out how much they spend on maintenance capex is to take the 3-year avg (or the last year, but less sampling data) all-in F&D costs (how much it costs to find and develop reserves) and multiply this by their production last year to get a mainentance capex cost.
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This was very interesting, and makes perfect sense. I guess my problem analysing this stock was that the thirty second "mental models" I use for evaluations don't extend well to most energy companies. It's probably because I've pretty much excluded them from research the last few years due to the volatility of energy prices. Thanks for giving me some new perspective.
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