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Microcap & Penny Stocks : NAMX -- North American Expl.-- Que Sera Sera! -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (3116)	3/30/1998 12:11:00 AM
From: Tummus1	Respond to of 4736

YEAH! Go get them Zeev Twest

To: Zeev Hed who wrote (3116)	3/30/1998 2:26:00 AM
From: Michael T Currie	Read Replies (1) \| Respond to of 4736

> PS: what is an MMBTU by the way and how do you get from an MCF to an MMBTU? MMBTU = million British Thermal Units = standard measure of energy content. The relationship of gas volume (MCF) to MMBTU varies because the gas itself has different components. This in turn affects the price received for gas sales. Under ordinary circumstances, 1000 MCF (1 MMCF) is roughly equivalent to 1 MMBTU. Gas fields tend to produce more up front than their oil counterparts. Sandstones typically show a relatively rapid decline after, say, 2-3 years . Chalks are extremely variable, with some producing over 50% of the total reserve base in year 1, others just producing very slowly over a period of many years. I would suspect that your 10 year figure for calculating net present value is a bit pessimistic. However, Bob is making a mistake by simply multiplying the 'reserves' by a gas price, especially since some of those are probable. All gas wells have production costs (typical operating expenditure = $0.20-0.50/MCF), all companies have overhead. Then there is the matter of royalties. If this is a private land owner, royalties are usually 1/8 at a minimum. No telling what the company's net royalty interest is. Bob, I suggest that you work with a range of figures that takes account of all that you do not know. I guarantee that the engineers who worked on this would specify a range of at least +/- 30% on their reported numbers. It's the nature of the business. Mike