energy

Underperform - Price 8.43 on Feb. 10
by Raymond James

Stone reported proved reserves totaling 519 billion cubic feet of natural-gas equivalent (58% gas, 77% developed) at year-end '08, falling short of its December guidance near 600 Bcfe. The predominant factor: a conservative cut to the proved reserves acquired through the Bois d'Arc Energy deal.... The deterioration in oil and gas prices relative to December '07 levels drove revisions. Stone also anticipates recording a $1.3 billion noncash impairment charge and a write-off of its entire goodwill balance....Stone posted all-in-reserve replacement of over 300%. It spent more than $1.3 billion of capital during the year, with most relating to the Bois d'Arc acquisition....Our proved [net-asset-value] per share estimate falls by over 30% to $32.20....While the impairment causes Stone's debt-to-cap ratio to rise above 50%, it has no impact on debt covenants. Market cap: $300 million.

5.2

Stone Energy (SGY) was upgraded to Outperform, Friedman, Billings Ramsey said. $45 price target. Valuation call, as the company is trading at a steep discount to its net asset value.

Stone takeover target

8.4, 8.26%

Downgraded by Matrix Research from Hold to Strong Sell

trading below asset values - lots of upside potential

lost me money

Long term debt is increasing with shrinking margins