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Microcap & Penny Stocks : DIGG - Digital Gas, Johnboy DIGGS it. -- Ignore unavailable to you. Want to Upgrade?

To: Don Richards who wrote (758)	11/10/1999 5:25:00 PM
From: RSkarsten	Read Replies (1) \| Respond to of 1774

You don't get it. If you wanted to buy a field that was producing 1 barrel per day, that field would cost you 25K to buy. You could then sell that barrel for market price, and hope that you would get enough out of the ground in the future to pay back your investment. If you wanted to buy a field that was producing 1000 barrels per day, it would cost you 25 million, or 25k per barrel of production. My guess is the value is based upon 3 years production at retail prices per barrel. If a company buys a field and can streeeeech the payments out across 30 years, then the production would hopefully be enough to make the payment on the property production and overhead costs, and have a little left over in the form of profit. The idea is to buy a field that has been proven to be able to produce for a very very long time. Russ