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

To: Mr. Oil who wrote (5942)	10/24/1999 5:04:00 PM
From: F9driver	Read Replies (2) \| Respond to of 15703

Ray...Since nobody seems to have reponded to your question, I'll take a stab at it. Gas reserves are priced in mcfs or 1,000 cf which you say is currently $3.00 u.s. This roughly corresponds to 1,000 btus. Gas quoted in gas contracts in the WSJ are in 10,000 mmbtus. 1 TCF divided by 1,000 or 1mcf is worth 1 $bill u.s. at $1.00 per mcf or 3 $bill at $3.00 per mcf. Commonly, for gas in the ground the current mkt. pr might be discounted at 10% per yr for 7-10 yrs depending on expected fld. life. Who knows what this reservoirs life is but at 10 yrs at 10% it would be worth roughly 38% of mkt or $1.14 at $3 gas. If we prove 1TCF at ELH, Htp owns approx 10% of Elh or $114 mill. Divide 30 mill shs. and you get $3.80 per sh u.s. 3TCF = $11.40 etc. The other way to walue is 4-9 times cash flow when operated and developed with about 7x cash flow for a good co. Hope this helps.