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COPYRIGHT 2005 Hart Publications, Inc.
Oil and Gas Investor: Like all analysts, you keep raising your commodity price deck. What are your thoughts on oil and gas prices?
Beago: I am long-term $40 oil and $6 gas. My attitude is, if you can buy a stock at those metrics and then the price of oil and gas goes above that for a period of time, that's just icing on the cake for investors. I don't have the answer on where oil and gas prices are going--it's been so volatile.
OGI: You were recently out on the road with an E&P company. What was the mood of the investors you met? Are they still interested in energy stories, or do they think it's too late?
Beago: Investors are certainly open to good ideas. It's true their returns have been excellent, so there's no doubt there's been some profit-taking. I would say there is caution in putting new money to work, given $60 a barrel of oil. But that said, they are looking for new opportunities to add to their portfolio. I wouldn't recommend a wholesale jumping into the sector tight now--it's an incremental decision. You have to be selective. But there are some strong stories out there: XTO, EOG Resources--they have outstanding portfolios of projects. Yes, you would have to pay up for these stocks, but they...
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