First off, I heard that drilling in the Elkton had stopped. Oil was indicated but the formation was "tight", meaning that stimulation would be required to produce. We still have two good zones with no water, so that's a start. The Berkley is setting up for a flare on one of the upper zones that contains 3% sour gas. That's not enough to retard normal production but it does give off a smell and thus requires neighborhood approval to flare. I haven't done any recent production and cash flow analyses and frankly, I don't think those numbers will influence stock prices much at this stage. What is interesting are some projected valuations based on assumed reserve calculations. If there are 400 million barrels recoverable as projected by one of the participants, that's $2.8 billion in the ground at $7/bbl. Taking CWQ's average and approximate 4% payout in the field results in a figure of $112 million, divided by 21 million shares is $5.33/share. Since that's U.S. funds, divide by 0.68 to get C$7.84 per share. That doesn't take into account natural gas which looks considerable, or anything below the Mississippian horizon, which also looks potentially large. These numbers can also be run for BEA/STF, but I don't own these issues so someone else can compute it. As for initial price targets, I'm still looking for C$0.70-0.75 on CWQ, and around C$2 - C$2.50 on BEA. This puts both issues into former resistance areas and is thus a likely first stop. If BEA can break C$0.75 - $0.80, it should be on the way.
Dale |
