Grayhairs,
The 6 month financials for FST were released yesterday and confirm that this company is bleeding and cash starved.
By the way it was interesting to see Greg Noval and J.P.Bryan on Business World yesterday.Mr.Noval was quick to point out that they were not solely interested in making big acquisitions.In his words "There are some very tasty small game out there".
Canadian 88 did acquire some land on Sept 16th at Strachan.
This Strachan activity must have caught his eye.
Also of interest,if you diligently read all postings at Kerms Korner you may have come across some statistics posted last week on U.S gas production.Apparently the 3 year average cost of production for a gas company including finding and developing the deposits is U.S.$1.55 per mcf.At this early stage in Strachan development it appears this discovery will be very profitable.At current winter gas prices and at 5 mmcf of production from 2-22 Tusks simple rate of return on their $700,000 total investment in this well including tie in and frac will be 83% in the first year of production.
Have you any idea when internal evaluations of proven and probable reserves at Strachan will be completed?
Thanks,
Richard
First Star Energy Ltd -
6mo results
First Star Energy Ltd FSTShares issued 24,016,1951998-09-25 close $0.465Monday Sep 28 1998Mr. John Squarek reviews the company Strachan The Strachan 3-22 well was spudded in February and was placed on tight hole (confidential) status in April. Full evaluation of the well potential will not be completed for several months. As the primary target (Leduc D-3 formation) was not encountered in the well, further multihorizon geological and geophysical reviews of the entire prospect area are necessary. Kentucky The Lawrence County, Kentucky gas well (Rome formation) was completed in March and placed on production in July. The well has been producing at initial production rates of approximately 300 mcf/d and 25 to 30 b/d of water. Its production and decline rates will be evaluated over the next three to four months. This evaluation will provide data for a possible refracturing of the well. A seismic survey has been completed for the selection of a deep well location prior to the end of 1998. First Star has increased its working interest in this 4,000 acre prospect to 40 per cent. In Johnson County, Kentucky a five well shallow gas program is expected to begin by the end of August (First Star 25 per cent working interest). These wells are expected to produce approximately 200 mcf/d each, and will be placed on production almost immediately. Caroline At Caroline, Alberta, First Star has begun seismic evaluation of its two sections acquired at a crown land sale (1,280 acres - First Star 100 per cent working interest). In August, a 25 per cent working interest was sold for $160,000. It is anticipated that a well will be drilled on this prospect within the next six to nine months and farm-out negotiations are in progress. In addition, there are three exploration wells on trend within six miles to the southeast which are reported to be Swan Hills gas discoveries with as much as 500 BCF of sales gas reserves.
CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
Six months ended June 30
1998 1997
Revenue
Oil and gas sales $ 268,586 $ 342,547
Interest and
other 5,056 7,890
Alberta royalty
tax credit 3,022 3,000
--------- ---------
276,654 353,437
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Expenses
Depletion 101,000 78,000
General and
administrative 232,866 142,281
Production 140,074 103,496
Royalties 27,055 35,410
Interest 5,246 9,577
--------- ---------
506,241 368,764
--------- ---------
Gain (loss) for
period $(229,587) $ (15,327)
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Gain (loss)
per share (1 cent) -
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