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

To: STLMD who wrote (3239)	7/5/1999 12:46:00 PM
From: STLMD	Read Replies (2) \| Respond to of 15703

Rick and Thread.. I based the spreadsheet on production rates and EPS growth rather than net asset value. I calculated 50 mmcf/day production per well(perhaps a bit steep) and a net profit of 1.75US per mcf(3.00 less ~1.15 production costs..reference Grayhairs). I estimated one well in 1999, four in 2000 and eight in 2001. If we assume a reserve of 1TCF gas it would take well over ten years for those eight wells to produce that. Do the math for multiples of reserve and multiples of wells. I assumed a P/E of 25 although growth rates in the first four years or so will be on the order of 100-400%. I purposely did not do any calculations regarding the other partners since they have too many other assets which would dilute out the productions. Trying to keep it simple. So as I see it, these companies are potentially worth more than their NAV if we assign a market multiple to this find and move forward with four producing wells per year. Any thoughts? Stephen