Ann: Commsec Investor Update Presentation, page-12

Still watching this one from the sidelines Dan.

@barrel81 ... O&G and especially the upstream business is extremely complicated and CAPITAL INTENSIVE. It is that component that brings most of them undone - the need for future development capital.

Don't worry too much about production profile and exposure to oil price price - that risk can be hedged.

Worry about the capital efficiency of the production and how profitable it is - (truly profitable none of this EBITDAX bull). What matters to all companies is EARNINGS.

So Dan, IMHO, EV/FCF is something the pay attention to in most companies - you don't want to pay too much for the cash being generated. HOWEVER, FCF does not create value for shareholders (what creates value is earnings about the cost capital).

I'd go as far to say, that FCF is almost irrelevant to ELK (as it is for any company that is required to make large amounts of investment into their business). Highly profitable companies can be FCF -ve.

My 2c for discussion.

Regards