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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 (3834)	8/2/1999 1:03:00 PM
From: Dave E.	Read Replies (1) \| Respond to of 15703

Hi Check, Sounds like you are more positive on ELK than previously. What are your thoughts on Q2 cash flow (which I expect by 8/25 or so)? Could this push us through the $6.00 broker target - esp given increasing word from ELH expected by that time? PS: Their Wyoming play looks like a neat money-spinner (not on the scale of ELH but solid ). Dave

To: Check who wrote (3834)	8/2/1999 9:57:00 PM
From: Bearcatbob	Respond to of 15703

Check, I copied your message and pasted it below. It now fits the windos. I guess we will have to see the 2nd quarter for ELK and WML. WML is very gassy and short term in their sales philosophy. This summer is seeing great revenues from gas. We will also have to see the results from the 50/50 well at Slave Point for both WML and Shell. Bob To: Bearcatbob (3830 ) From: Check Monday, Aug 2 1999 10:03AM ET Reply # of 3842 Hi Bob, <<From what I can see the debt in relation to production numbers are similar to ELK and the current production is almost all gas and associated liquids.>> 1st Q (ended March '99)in CDN $ millions Cashflow Working capital + total debt WML 1.425 66.6 ELK 3.323 71.1 Hardly "similar". Since then, WML increased it's production to 3.2 MBOE by the end of April, but then they sold $13.7 MM of producing assets. The sale and the recent equity issue would have reduced their WC deficit and net debt to about $42.6, still much higher in relation to 1st Q CF than ELK. I expect to see much better CF numbers from ELK for the second Q as some 40 % of their production is oil. Their balance sheet should also improve with some minor dispositions and the recent issue of flow -throughs. They also have much greater reserves in place and some 2.2 MM fewer shares out on f/d basis. Given that the two companies have almost identical upside leverage at ELH, on the basis of that alone, there's no doubt in my mind as to which is the better pick. Have a good day.