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

To: viper who wrote (624)	6/16/1998 4:55:00 PM
From: grayhairs	Respond to of 1207

viper, IMHO, they will drill a second well because THEY ALREADY KNOW that the first well will be quite an economic success. Remember they have four zones uphole behind pipe that they haven't touched yet and which have to be worth a minimum of ~$10MM by themselves!!!! They will want to earn more lands because of that success alone, and so they will drill at least their next option well to earn an even larger piece of this play (JUST MY OPINION, OF COURSE.) Their minimum gas rate on the Swan Hills(is it???) zone is probably no more than 5 - 10 MMCF/d because of the uphole sweet gas and liquid value. [With 1 year gas prices of ~$2.50/GJ now, there certainly is NO doubt that 20 MMCF/d from the Swan Hills does it all by itself!!] I have previously quoted certain reserve numbers on this thread. So, I should comment now that if Scotchman's number for sour gas content is correct (15 - 20%) then all my past reserve estimates are on the low side by ~25%!! And, if reservoir pressure is in fact over 6,000 psi (like I am now hearing) then my reserve numbers are light by another ~10%!! So, instead of expecting just ~50 BCF/sec, I'm all of a sudden looking for ~70 BCF/sec. Using $0.75/mcf as an in the ground gas value, the unrisked value of this play goes to roughly $50 MM/sec!!!! Just a few sections of a play like this and pretty soon you're talking some real coin. I'M PRETTY CERTAIN THAT APACHE WILL EXERCISE AT LEAST THEIR FIRST OPTION!! That's one of the reasons that I picked up more TKE just before the close today. Later, grayhairs