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Microcap & Penny Stocks : OILEX (OLEX)
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To: John Boluyt who wrote (660)12/23/1996 1:45:00 PM
From: Yiqun Xie   of 4276
 
I talked to Allen Burditt this morning.

They are currently producing about 150 barrels/day and have 2 oil retrieval system fully working. He is kind of vague when I asked him if they have overcome the difficulty of unit breaking down problem. But I learned it caused by lubrication problem. I also asked if the whether is a factor for their production and he said it is. He sounds confident about inceasing production volume in the first Q of 1997. When I asked their expection of daily production in the end of March, he said it could be 400 to 1000 barrel.

He said they already factored the purchasing cost of retrieval unit into the cost of $2.5/barrel. They assume 15 to 20 years of lifetime of the unit. The first system they were using was Klaeger, but the later ones are no longer Klaeger systems. It cost more and supposed to have much higher production capability. The cost is $150K vs. $85K of Klaeger system. When I asked him if they own 20% of the manufactory company. He said not yet but they will. They will have two more systems arriving at the first Q, and another 6 later.

The company will try to acquire more properties in 97. They have 300 wells now, but it's very possible to trade some of them for other properties. He emphasized the value of the property they own now, and said he does not understand why share dilution would be a concern among the investors.

I think that's all I got.

Merry Christmas!

Yiqun
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