Arconenergy, Inc. (Long Term Investors and Fundamentals) Message Board

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Gold/Mining/Energy : Arconenergy, Inc. (Long Term Investors and Fundamentals)

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To: Sheri who wrote (20)	2/8/1998 1:22:00 PM
From: Jeff Harrington	of 1757

From a Fax received by Gabard this information was obtained from the company (and transcribed over the phone). This is the company's Bob West overview: Bob West Acquisition Field Overview Book Value: 25 Million Property Description: 290 Lease hold acres containing 3 producing wells all acreage contains proven natural gas reserves. (Plus 14 Miles of installed pipeline). Revenues: Natural Gas price averages $250 per MM BTU 1997 with annual high price of $3.07 for MM BTU in December. A typical fill well produces 10 MM CF per day. At 1997 prices, a typical well will produce $540,000 per month after royalties, production severance taxes per month after royalties, production severance taxes and direct lease operating expenses. At expected 1998 prices, the well will produce monthly revenues over $648,000. Revenue Development: Arcon will re-complete the three existing wells exposing additional reserves to the well bores, thereby increasing production. The company will also drill and complete a new well to a depth plus or minus 17,000 feet during the last quarter of 1998. After the 1998 activity the company will drill 4 new wells per year for 5 years to develop the lease hold on 80 acre space. The operating revenue for the project will be over 1 billion. Upside Development: the build has been developed on 40 acre spacing to date. Should the company elect to develop the lease hold on 40 acre spacing the recoverable reserves and revenues could be doubled. Reserves: Proven developed natural gas reserves in the three existing well bores are estimated at 35 BCF. Proven undeveloped and possible natural gas reserves on the remaining leasehold are estimated to be 360 billion to 500 billion Cubic Feet. Capital costs: Costs to re-complete the three well bores and drill one new well in 1998 is 15 million. Annual drilling and completion budget for each subsequent year is 20 million. Total development costs is 115 million.

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