Bob,
Nothing is a sure thing when it comes to oil and gas exploration. But, a few facts can not be denied. ELH #1 blew about 5 BCF of gas and a couple million bbls of water before they got that cork in her. Why couldn't they cork her a long time ago from surface ?? Cause the frickin pressure was so high. If the pressure was lower, or if the pressure had declined as a consequence of production and depletion there would have been no problem. But, the pressure stayed right up there, even after she had blown 5 BCF !! This is one big MF'r, Bob !! HUGE !!
I happen to share Rick's opinion. The exploration risk is gone. They have already found the mother lode !! All they have to do now is tap into it again and get it on production. $$$$$$$$$$$$$
I believe there was a point in time on this play when it was very important to consider the downside risk. In my mind, the risk today is far different than the risk last November 24. I personally do not today require the same downside protection that I wanted back then. But, others may feel differently.
WRT WML, I will remind you that you do not have the same assets in the company today that were there on November 23. And, some of the remaining assets are destined to be sold to pay down debt and to finance ELH. So, how much should one pay for WML without it's ELH interest today ???? It's not the same amount as it was November 23 !!
As a closing comment I will add that I believe ELH is truly a "company maker". I think that even a "corporate shell" that has 4-5% and cash on hand today to drill 2 wells will be a "Company to deal with" in less than 2 years. Just grind the cash flows and see what these wells will crank out. With 2 producers, the ELH cash flow will do a lot to pay for the remaining required development (even with the odd dry hole that WILL be drilled on the play).
Enjoy your holiday tomorrow, Bob.
Later,
grayhairs
P.S.-- I am not at all trying to "convince" you to spend the cookie jar, Bob. If you are not comfortable with the play and the risk you probably should leave that jar on the counter. |
