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

To: Check who wrote (3538)	7/16/1999 11:40:00 AM
From: STLMD	Respond to of 15703

Check...I think the NAV calculation for ELH is clearly unsophisticated but best viewed relative to a Book Value of the companies like KOB and PYR that have no real holdings at this time. I prefer to calculate potential EPS over a five(1 TCF) to 40(8TCF) year period of time. With an addition of three producing wells per year (conservative), EPS growth rates will be on the order of 300% the first year, 100% the second year, 50% the third, 33% the fourth and so on. Therefore I believe that the stock prices will be on a parabolic curve once the wells begin producing and reach closer to their NAV approximately six to 20 years out, depending on the reservoir sizes and the additional plays. Any buyouts of rights of the JVs would more than likely be closely tied to NAV and not potential EPS. Whichever way we approach this, TMK provides a huge upscale potential but certainly not without significantly greater risks than those primarily invested in ELH at this time. I only wish I had another tree to shake or cookie jar in the attic to play with TMK, since my ELH investments have already done remarkably well since last May 1998. Stephen

To: Check who wrote (3538)	7/16/1999 2:10:00 PM
From: grayhairs	Read Replies (2) \| Respond to of 15703

Damn, you were up all night typing that Check !!!! A great post, IMHO. Just a couple of comments: <<.....these are pretty subjective calculations as I have not read the hundreds of lease agreements involved, (and I understand the royalties vary from one to the next), and also at this stage, the areal extent of the reservoir is anybody's guess. In this sense, I don't think even the companies involved could come up with a precise and definitive % numbers.>> There is no need to read all lease agreements. Every participant is subject to identical royalty burden by the underlying leases. That treatment may vary from lease to lease, but as to the participants, their royalty burdens will be identical. As you state, there is no certainty as to the size or areal extent of the reservoir or even the success of future development wells. It is therefore fairly common practice to adopt the interests of the existing well for the computation of "pool share". (This may ultimately prove incorrect, but at least initially it is 100% accurate.) <<In this sense, I don't think even the companies involved could come up with a precise and definitive % numbers.>> Sorry, but I vigorously beg to differ with you on this one. <gg> They better be able to or they should not be in the business. <<There is less excuse for not getting the fully diluted number of shares right, nor for reporting vaguely or not reporting the various side deals being done. (gggrrrrr.... to a whole lot of you)>> You got that right, Check !! Yes, it is blatant deceit to announce an interest acquisition if a "spin off" (whether agreed or only intended) of some part of that interest is not also simultaneously also announced. Pure Bullshit and fraud !! That's the kind of stuff that lawsuits arise from !! <<I find it useful to start out with some realistic present worth number...>> I absolutely, positively, wholeheartedly and completely agree !!!!! How else will we know when the train has reached the station !! Regarding the WML interests, I do believe that I pulled my value straight from WML's recent press release which discussed their ELH and GSJBJV prospects in good general detail. I'll verify and get back to you later. Have a great day. Later, grayhairs