Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Wizzer who wrote (5009)	4/26/1998 11:04:00 AM
From: WINDSURFER50	Read Replies (2) \| Respond to of 24918

Message to Kerm: Could you or one of your associates give a summary of Energy Trusts from the point of view of those heavily weighted in gas and those weighted in oil? Based on your assessments of the above, which of the many Canadian Energy Trusts are likely to provide the best return over the next 10 years based on reserves, new exploration, management competence, market conditions, etc. I realize this is a very deep reply solicited. I, like many other stock market players, find myself wanting to channel some of my holdings into these Trusts to get a decent income stream. I'm also trying to nail down the capital gains implications of a declining asset. For instance, a person buys a Trust for $10, holds it for 2 years, sells it for $11. Is the capital gain $1 or $1 plus all the distributions received in the 2-year period (or is the capital gain a percentage of the distribution calculated by some set formula)? Thanks for helping.

To: Wizzer who wrote (5009)	4/27/1998 11:24:00 AM
From: SofaSpud	Read Replies (1) \| Respond to of 24918

Wisam / Fracing I see no one has taken a shot at your question over the weekend, so let a non-expert embarrass himself. "Frac" is short for fracture. Despite the terminology (pool of oil), of course you're dealing with something that's trapped inside a rock formation. Two important characteristics of an oil-bearing formation are porosity and permeability. Porosity refers to the capacity of the rock to capture/hold the oil. Permeability refers to the ability of the oil to move through the rock (to the drill pipe). If you have high porosity and low permeabiltiy, you can all the oil in the world and not be able to produce much. One response might be to fracture the formation, which involves putting an explosive charge down the pipe. The hope is that you will improve the ability of the oil to flow through the rock to your hole. It is not an exact science, and there are pools that have effectively been ruined by fracing, so yes, it is possible that JV partners might disagree. OK, somebody who actually knows what they're talking about want to take a stab at this?

To: Wizzer who wrote (5009)	4/28/1998 3:27:00 PM
From: Kerm Yerman	Read Replies (3) \| Respond to of 24918

Wisam / Fracing Didn't want to field this one by myself. Asked a petroleum engineer and here is his response. Frac'ing: is a means of hydraulically splitting the formation to allow more inflow. You pressure up the zone with oil/water/frac fluid in a specifically timed procedure, crack the zone, then follow up with a "proppant" (sand/beads..) to hold open the fissure permanently thus allowing more exposed zone. A JV company may disagree if it has been tried in similar applications with unsuccsessful results, or the procedure, or the choice of fluid, or the tonnage of sand (length of frac) or the risk of breaking out of zone or into bottom water... all good reservoir engineering stuff. A pressure buildup analyisis should be conducted prior to the frac to determine the degree of damage or "skin" factor.