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Microcap & Penny Stocks : OILEX (OLEX) -- Ignore unavailable to you. Want to Upgrade?

To: Larry Sallee who wrote (2274)	1/6/1998 6:49:00 AM
From: Ditchdigger	Respond to of 4276

Larry, So you can put the concept of "potential reserves into perspective, here's some definitions: Proved reserves - Reserves that have been proved to a high degree of certainty by analysis of the producing history of a reservoir and/or by volumetric analysis of adequate geological and engineering data. Commercial productivity has been established by actual production, successful testing, or in certain cases by favorable core analyses and electrical-log interpretation when the producing characteristics of the formation are known from nearby fields. Volumetrically, the structure, areal extent, volume and characteristics of the reservoir are well defined by a reasonable interpretation of adequate subsurface well control and by known continuity of hydrocarbon-saturated material above known fluid contacts, if any, or above the lowest known structural occurrence of hydrocarbons. Probable reserves - Reserves susceptible of being proved that are based on reasonable evidence of producible hydrocarbons within the limits of a structure or reservoir above known or inferred fluid contacts but are defined to a lesser degree of certainty because of more limited well control and/or the lack of definitive production tests. Probable reserves may include extensions of proved reservoirs or other reservoirs that have not been tested at commercial rates of flow or reserves recoverable by enhanced recovery methods that have not yet been tested in the same reservoir or where there is reasonable uncertainty that the program will be implemented. Possible reserves - Reserves that may exist but are less well defined by well control than probable reserves. These include those based largely on log interpretation and other evidence of hydrocarbon saturation in zones behind the pipe in existing wells, possible extensions to proved and probable reserve areas where indicated by geophysical or geological studies, and those to be recovered by enhanced recovery methods where the data are insufficient to classify the reserves as proved or probable. Includes hydrocarbons in fields which have been discovered but need further delineation, ownership extension or some combination of lower development costs and higher prices (and, therefore, are not currently commercial) before they can be considered proved or probable reserves. (4) Potential reserves ----- whatever weak data is left over that can't even qualify for Possible. <vbg> In other words very very low likelihood of occurring. DD(we can thank Taylor Mills)

To: Larry Sallee who wrote (2274)	1/6/1998 6:57:00 AM
From: Ditchdigger	Read Replies (1) \| Respond to of 4276

Larry,to give you an idea of how the industry values this oil, Kenny: I've seen numbers used from $3-$6/bbl all around the world, depending on development costs, lifting costs, and fiscal terms. The number will be different for each specific development, but you can use the above range for a good conservative-to-liberal valuation spread. I'm not as sure about natural gas valuations, but if you convert the above figures to $/mscf at 6:1, you get $0.50-$1.00/mscf. Try that and see if it get you in the ballpark.Thanks Razorbak-former Murhpy Oil analyst *********** Ditchdigger, with such wells you must take into account the cost of finding (if they drill additional wells around) and the cost of bringing the oil up, these are very "small wells" I would suggest you use numbers closer to $3/barrel. You also must factor in what royalties or other sharing agreements there might be. Thanks, Zeev Hed for your opinion DD *** Hopefully this will help you determine a realistic value for your oil.DD,