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BME

Opened a position on BME today (2.30). The company recently provided an update and upped its 2005 production and cash flow guidance. At this level, it is traded at 4.6 of its 05CF, and approximately $35K of E/boe/d. BME’s production growth has been impressive and very consistent, and valuation appears to be relatively cheap. It is a rather small even among juniors and so far I have not see anyone covering it. I am looking for a $3.0 exit in a 12-month period, which will provide about 30% return. This is a good replacement for RSE.