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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 (3224)	7/4/1999 9:19:00 PM
From: grayhairs	Read Replies (2) \| Respond to of 15703

Hi THC, <<How much would that work cost? Would KOB have to pay for it's share of the work to maintain it's share in the profits?>> The cost obviously will depend upon the actual size of the reservoir and many other factors that I have no info on. But, I'll guess that it'll take another 5 wells (~$40-50 MM) to get a fair degree of confidence in the larger (8-16 TCF) reserve estimates. But, what the hell is wrong with being confident with "just" 2-3 TCF and adding 2-3 TCF with each subsequent well ?? <gg> All participants will have to pay their proportionate share of future well costs. If they do not, the joint operating agreement would typically provide the other participants an opportunity to pick up a pro-rata share of the defaulting parties interest in the new well. The interest that was in default would only revert to the defaulting party after all costs plus a very hefty penalty had been recouped by the "risk taking participants". <.... YOU JUST NEVER KNOW. When you think you have a sure thing, be prepared to be surprised.> You got that right. This is a risk business. Nobody should assume that it is a sure thing. It isn't. But, we're not talking "exploration risk" at this point !!! <gg> Good luck to you. Later, grayhairs