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Gold/Mining/Energy : Canadian Oil & Gas Companies
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To: Kerm Yerman who wrote (446)10/10/1996 10:56:00 PM
From: Richard Saunders   of 24933
 
Kerm/ Head scratching stuff re: Wolverine. A couple of things - a news release back on Nov. 8/95 indicated WVE was forecasting cash flow of "just under $1 million". As of June 30 cash flow was $144,472 - question #1 for me is "what happened & what's the plan?". Another news release Nov. 21/95 indicated something about WVE forming a joint venture with "ALBERTA SELECT INVESTMENT CORP." & "GLOBAL FOCUS RESOURCES INC." Question #2 is what's the story behind this arrangement. Supposedly the jv arrangement would kick in up to $10 mil. and WVE would operate the arrangement with incentive compensation based on "the net operating cash flow of the properties acquired." How (if at all?) will WVE use the arrangement to achieve the stated target of 1200 BOE by "early 1997"? I still maintain that the trendiness of royalty & income trusts has attched premium values to many assets. How will WVE operate in the competitve acquisition marketplace? Paying too high a price will make longer term profitability a challenge. Question #3 - what experience is mgmt. bringing to the table? Who's in the field, especially in the Alliance area? Have they "beenderdundat" before in the area - the focus on horizontal drilling seems possibly a quick fix but I suspect costs will be high. Last question - operating costs appear to be high. What does mgmt feel? What are possible reasons and how will future operations compare? What's mgmt's. read re: product prices. That's it for my questions - thanks for drilling deeper.......
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