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Gold/Mining/Energy : Oil Sands and Related Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Bread Upon The Water who wrote (9862)	5/14/2006 2:23:26 PM
From: insitusands	Read Replies (3) \| Respond to of 25575

<I do understand that the wells positioning is just one part of the entire process of THAI...> Bill, it is not just the positioning of a vertical and horizontal well which enforces the patent. It is their use in combination with air injection to create a low pressure sink which in turn allows a short distance displacement extraction of oil through a forward moving fire flood front that is novel and therefore patentable. This has never been done before. Ergo, some person/company cannot simply come along, copy the entire THAI process and simply use another form of air injection (or different size wells or whatever) so as to avoid paying a royalty. If one were to change the nature of the setup by say not having air injection or not having a horizontal well then one would not be infringing on THAI. Of course this changed process would not work either. IMO, it will be virtually impossible for THAI to be infringed upon. When one considers that CAPRI will upgrade the oil being produced close to 30 API the mind boggles at the elegance, efficiency, power and small environmental footprint of this process. As to whether I'm right about THAI, the market, at least so far, seems to agree with my interpretation of its potential. Gates invented DOS? No, he bought DOS from IBM for the grand total of $50,000. His parents were successful in business and knew executives of IBM which is how he got his "in".

To: Bread Upon The Water who wrote (9862)	5/14/2006 3:22:52 PM
From: was Michelangelo7	Read Replies (1) \| Respond to of 25575

Back to PBG: Having read the patents and background for THAI and CAPRI, I can't see why they would not work, but because the current market price of PBG is below my view of the value of Whitesands alone (even if SAGD were to be used) this is still a no-brainer investment. PBG suffers from the "conglomerate" or "closed end mutual fund" discount. In today's market most people want "pure plays" and pay up for them, but presented with multiple plays within the same company they tend to discount the ones they're not interested in -- in some cases totally -- but only the positives. Any hint of a negative (such as a delay) from any of those discounted operations results in an undiscounted penalty to the perceived overall value. I'll repeat my view of the market's valuation of PBG from a month ago with updated numbers: Value of Whitesands leases (with additions) is in the $30 range. This of course is assuming SAGD will be used. No value is assigned for THAI/CAPRI since it's not proven. No value is assigned for Canadian and Columbian conventional assets, even though they are producing and ramping up. But hey... what if THAI doesn't work (and is delayed another month)? Lets deduct about $7 just to be safe. But hey... what if they don't drill as many wells in Canada as hoped? Lets deduct another $2 just to be safe. But hey... what if they're still having trouble with 1 well in Columbia? Lets deduct another dollar just to be safe. Voilla! (sp) we arrive at our current price of just under $20. So you see, the market is very methodical and rational when evaluating PBG! BTW, re the patent protection issue, even if THAI/CAPRI were to be used only on the Whitesands lease with its reduced cost/enhanced production/upgraded product advantages it would a least double its value on a DCF basis. imo m7