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

To: John Rowe who wrote (3383)	6/5/1998 8:54:00 PM
From: Steve	Read Replies (1) \| Respond to of 4276

John, It is only in the last few months that Oilex has begun to produce at the 250 barrel per day average. They only produced about 20,000 barrels in 1997 but will produce nearly 75 to 80 thousand barrels this year. Gross revenues will be about $1 million this year with net income in the 200,000 dollar range. I think we have to remember that Oilex has drilled 4 new wells and purchased the new 5th generation swabbers from ORS. They have covered operating expenses with the debenture money and now have a credit line with CAYC (the convertible debenture at $2 a share). The stock price seems to be a function of dilution but there is more to the story. Oilex's Bigfoot field is proving to have almost double the oil reserves when originally purchased. This fact will increase Oilex's value. But, oil prices have failed to recover much thereby depressing asset valuations. It looks that we're stuck with $15 a barrel oil for awhile. Some of Oilex's oil sells for a premium because of its API gravity and this does cushion Oilex somewhat. My feeling is that analysts don't realize that production swabbing is an effective way to lower lifting costs. The fact that Oilex has proven that a reduction of up to 50% in lifting costs over the pump jack method has been achieved with production swabbing is an operating detail that is not apparent yet. When the financials are released for the entire year of 1998 this operating detail will become apparent. This fact will not significantly show up on the bottom line until later this year.