KOB.TO - East Lost Hills & GSJB joint venture Message Board

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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture

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To: MIRU who wrote (12995)	12/5/2000 2:52:34 PM
From: grayhairs	Read Replies (1) of 15703

Hi nostarch. <<...because a faster rate increases the current value of the same reserves.>> Not necessarily. It depends entirely upon the price forecast\schedule. For example (and simplicity), a California gas well that produced 40MM/d in 2000 would have generated far less profit (value) than one that produced 20 MM/d in 2000 and 20 MM/d in 2001. One "values" ELH reserves based upon a "pool" production rate and product pricing over the life of the "pool", not just the "front end" profile for one or two wells. The ELH reserves are gigantic (multi TCF) and will require many, many more wells to exploit and produce the reserves in the next ~30 years. JMHOBWDIK. Later, grayhairs

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