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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (3183)	7/1/1999 10:31:00 PM
From: Bearcatbob	Read Replies (2) \| Respond to of 15703

THC, While not with the wisdom of Hairs of Gray I have put my recent money into Westminster. Perhaps not the upside of HTP or KOB - but it was a $7.00 stock last year before ELH and they are currently testing a high potential well at Slave Point. Not the up - but I have that with PYR. I wanted to play some more with a little less risk. Bbob

To: ForYourEyesOnly who wrote (3183)	7/2/1999 12:59:00 AM
From: grayhairs	Read Replies (1) \| Respond to of 15703

Good evening THC. I am not prepared to throw "probabilities" at various reserve sizes but I am comfortable and confident in saying that the ELH discovery is certainly world class. And, I will say that, IMHO, the reserves exceed 1 TCF. For my own work, I use my "best current estimate" gas reserve of 3 TCF. But, I caution you that this is only a calculated guess. My estimate may be optimistic. Or, it could be dwarfed by actual reserves as high as 14-16 TCF. Nobody can tell us today what the actual reserve is simply because nobody knows. There isn't yet sufficient good quality data to precisely define the reserve. (As a point of interest, if the reservoir is as large as 16 TCF, nobody will be able to reliably quantify that reserve level until the pool has actually "produced" 1.5 TCF !!!!) <<Was the ELH the only reason for the move in KOB stock? If so, if we remove the ELH potential, is another dive down to pennies possible? Is it possible that the other leveraged plays (HTP, TMK) are nearly as dependent on the success of ELH?>> Others are better qualified to answer these questions but I will offer my opinion and simply invite others to also comment. I don't know that ELH was the only reason for the move in KOB stock but I do suspect that it was certainly the main reason. I also suspect that IF you were to remove the ELH potential you would see the pennies again, and very quickly. I will also comment that the leverage calculations by EJ are relative to the share prices as of the date of their spreadsheet. That is, with respect to KOB the 1500% gain at 8 TCF would translate to roughly a share price of $15 (a gain of $14) compared to a risk of $0.90 (a $1 investment declining to $0.10). So, the reward/risk, to me, is more like $14/$0.90 or about 15.5 to 1. TMK is, I believe, even more dependent upon ELH than is KOB (although TMK does have an interest in the GSJVJV). HTP does have other assets and while it too is very dependent upon ELH I do not believe it is as reliant upon ELH as is KOB. HTP also has an interest in the GSJVJV while KOB does not. When I made my very first purchase in the ELH play I recognized that the prospect potential was huge. I made a very quick review of all participants and I zeroed in on KOB as my "participant of choice" for a few reasons -- TSE listing, a decent cash position at that time, great leverage, and good trading volumes so a sizable position could be easily purchased. I did not care about other corporate assets because it was clear that ELH would contribute the dominant asset value very quickly (I had enough confidence in ELH that nothing else mattered to me.). As time rolled on however things changed -- HTP and SOB merged, several financings were completed, the GSJVJV was negotiated with HTP participating and KOB not participating, etc. I also learned more about the other assets in HTP versus the other assets in KOB. As a result, I sold off my entire "long term" <<gg>> holding in KOB and I replaced it with HTP. I also bought some BKP in my RRSP account and I still day(s) trade that stock !! <<IF the downside is –90% (reverse 10-bagger) and the upside is 1000% (10-bagger), then I am inclined to say that at current prices perhaps the risk/reward situation is only gfair.h Perhaps it would be best to wait for the inevitable gsetbackh of one kind or another to load up at a level where the risk/reward scenario is better?>> Of course we all have to make these decisions for ourselves. I for one will usually take bets (with "reasonable" chances of success) if the reward is $10 and the risk is only $0.90. Good luck in sorting through this one. Later, grayhairs