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Gold/Mining/Energy : DALTON RESOURCES DAL:ASE -- Ignore unavailable to you. Want to Upgrade?

To: Michael M. Cubrilo who wrote (265)	4/28/1998 10:24:00 PM
From: grayhairs	Read Replies (1) \| Respond to of 486

Hi Mike, A rather interesting concept to me. I guess you young fellows do things differently then us old guys. I really do have to get back to some income tax crap so will have to defer further discussion. Until later, grayhairs

To: Michael M. Cubrilo who wrote (265)	4/28/1998 11:13:00 PM
From: RIK	Read Replies (2) \| Respond to of 486

Hi Mike I recall a well I drilled........20 feet of gas pay in a sandstone --classic log response ...very porous , very high resistivity and bigtime cross-over. On DST it started flowing at 5MMCF/D , 90 minutes later it was flowing at a rate less than 1MMCF/D ......of course the pressure data supported the fact that we had encountered a limited reservoir and the well was abandoned. It was a wildcat well . Needless to say.....I learned a bit from that well. cheers rik

To: Michael M. Cubrilo who wrote (265)	4/29/1998 1:25:00 PM
From: Keith Utz	Read Replies (2) \| Respond to of 486

Michael, althou not an expert in the oil drilling business I disagree with your statement<<So, yes, the 10% number includes all the above.>>. I do know something about logic and numbers so I know if the chance of hitting is 10% before the well is spudded than the odds have improved when there are encouraging log shows, deep casing run ect. Surely you agree that the chances are better now than if they had no evidence of gas at all. Each increment of positive information increases the chance of success. It does not matter what business you are talking about ..logic is universal. So IMO greyhairs is absolutely right when he says that the odds are now better than 10%. Keith

To: Michael M. Cubrilo who wrote (265)	5/7/1998 11:35:00 PM
From: grayhairs	Respond to of 486

Michael, I see that you have retracted your "absolutely YES" position in a dialogue with Keith Utz at a subsequent post on this thread, so I need not further address that. However, for those that may not be involved in the business we must ensure that one thing is clearly understood with respect to "tie-in economics". That is, the cost of drilling, completing and testing a well is of ABSOLUTELY NO IMPORTANCE TO THE DECISION OF WHETHER OR NOT A WELL GETS TIED IN FOR PRODUCTION, IRRESPECTIVE OF IF THE WELL IS DEEP, SHALLOW, OR OTHERWISE. In your example, the $4 million is of no consequence. It's spent. Gone. Kapute. Water under the bridge. The only thing of interest is whether or not the value of the hydrocarbon in that small reservoir (that may deplete within a year) exceeds the cost of tie-in ($2 million in your example) plus operating costs and royalties, etc. On the other hand, an expected $4 million drill, case, complete, equip and test cost is a very important factor in the decision as to whether or not any additional wells are to be drilled. Later, grayhairs