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Gold/Mining/Energy : Tusk Energy (TKE) -- Ignore unavailable to you. Want to Upgrade?

To: Michael M. Cubrilo who wrote (417)	5/8/1998 2:17:00 AM
From: grayhairs	Read Replies (2) \| Respond to of 1207

Michael, Well, let's talk about some facts then!! The companies involved in this play have cased the well and the drilling rig has been released. How were they able to make that decision? Well, they reviewed all of the technical information available to them, and they drew upon their expertise and their consultant's as required, and they determined that it need be cased. In arriving at their decision they had their individual estimates of "Reserves" and "Production Rates" for each of the prospective zones encountered by the well. YOU KNOW AND I KNOW AND THEY KNOW THAT THOSE ESTIMATES ARE ALL WRONG, WITHOUT FAIL!! BUT, WE ALSO ALL KNOW THAT IT IS THE BEST THAT THEY CAN DO WITH WHAT THEY HAVE!! AND WE BOTH KNOW AND ADMIT THAT, IN SPITE OF THE SHORTCOMINGS OF THEIR ESTIMATES, THEIR ESTIMATES ARE MUCH, MUCH BETTER THAN YOURS AND MINE. We also know that even when they have completed and production tested their well, THEY STILL WILL NOT KNOW DEFINITIVELY AND CONCLUSIVELY WHAT THEY HAVE FOR SUSTAINABLE PRODUCTION RATES AND/OR RESERVES. But, we do agree that their estimates will then be better than they were before they actually completed and tested the well. But, the sad fact is that they will not know precisely what their ultimate reserves are until after the last drop has in fact been produced and the pool has been abandoned!! Do you not remember the "Beaver River Gas Disaster", or are you too young?? In that case, even after all of the wells were completed and tested, the production forecasts and reserve estimates were miles off!! Instead of a commercial project life of 30 to 40 years the field produced for what, roughly 1 year? And this after the expenditures of what, over a hundred million?? And, yes forest fires do destroy production facilities once in a while. And after such events, it may not make economic sense to rebuild facilities that were destroyed, just to get that last bit of what had previously been a "proven" reserve in the well. So there goes the reserve estimate that was carried on the books and here comes a writedown at year end. My point is simple. Oil & gas exploration and production is a risk business and crap happens!!!! Almost all shareholders do understand that. Common shareholders do not expect\require\deserve guarantees. They do expect\require\deserve fair\honest\competent management of the assets they own. It is totally unfair (and in my opinion a complete dis-service) for you and others to advise shareholders that there is at this time only some indeterminate and purely "speculative potential" for commercial production from the Strachan well (simply because the well has not yet been completed and "formally" production tested). Of course this well has a realistic potential for commercial production. It would not be standing cased today if it didn't. You know that. I know that. Why tell others otherwise?? Of course we can't guarantee any given level of producibility nor can we guarantee any reserve. Because I happen to be very bullish on the prospects for the Strachan play, I'll be accused of "hype" again in the future and many will be concerned that I'm trying to pump and dump. Nothing I can say can or will remove that suspicion. But, there are two sides to that coin Michael. When I read some of your comments, and those of another on this thread, I could get very paranoid and concerned that you may be trying to influence and "accumulate" stock at these levels. Why else would you say some of the things that you have? For you to communicate to shareholders that their Strachan play is "speculative" because YOU SAY that the well has no PROVEN RESERVES, no EARNINGS and no NEWS RELEASE could possibly influence certain shareholders into "dumping" their stock at current levels. But by your own admission, you have not seen any technical data on the well. So Michael, how is it that you can even claim that the well has no proven undeveloped reserves? And, please do explain for me the logic that supports your claim that just because a well hasn't actually demonstrated earnings, it must be considered speculative. As an analogy do you suggest that Hibernia was speculative until the day of "first sales"? And, in the event that the Strachan well might be successfully completed for commercial production, and tied in, and actually placed on sustained production later this summer, why must the well remain "Speculative" simply because the companies may chose to preserve a tight hole status and not issue a press release?? HOW WILL YOU FEEL if this well is completed for 25 - 50 MMCF/d later this summer and you find out that you influenced some elderly investor (like me!!) to sell off all of my stock at these levels?? Michael, there is not an oilman in this town (worth his salt) that wouldn't write a cheque today for at least $1 million for the 100% interest in this well, all technical information SIGHT UNSEEN!! A few years ago, Chrysler Corporation was considered a "real company" by some and it too had the attributes that you refer to. But,it later went into Chapter 11 (or was it actually 7?) so as they say, every day has its dog! Or, is that every dog has its day? :-) :-) Later, grayhairs P.S.- We often hear about negative results and disappointments when production testing wells. But, have you ever seen a case where the productivity of a well was actually underestimated prior to a completion and subsequent test? Or, have you ever seen a case where the recoverable reserves of a well were initially underestimated?