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Gold/Mining/Energy : first star energy FST on the ASE -- Ignore unavailable to you. Want to Upgrade?

To: Diamond Daze who wrote (568)	7/12/1998 12:52:00 PM
From: RIK	Respond to of 754

Chris , IMO the possibility of this stock going to $10 went down the drain when the Leduc zone was `dusted'. Apparently a deeper , LESS significant zone was encountered in the wellbore. The question is ....HOW SIGNIFICANT? A big blast of gas on production test can be quite meaningless ....all it really tells us is that there is `at least some' reservoir quality rock that is gas bearing. In a worst case scenario we could be dealing with a limited reservoir ( i.e. a zone that will not be exploited by virtue of its small areal extent and / or uncommercial reserves ). The Apache group have acquired important pressure data which will be integrated with a NEW geological / geophysical interpretation. That brings me to answering your next question .. "when will it run again". The next important event is whether or not Apache elect to drill the first option well . They have all the technical information and they pay the brunt of the costs on these deep expensive wells. Since MOST shareholders have been `tight-holed' , we will have to depend on Apache's direction. If they elect NOT to exercise this option , then that would be very detrimental to share prices of the juniors involved. If the terms of the original agreement are changed , I would also view this in a very negative way. The Strachan juniors will run again if Apache elects to drill an option well per the original agreement !!!

To: Diamond Daze who wrote (568)	7/13/1998 1:55:00 PM
From: grayhairs	Read Replies (1) \| Respond to of 754

Hi Chris, An illogical suggestion has been made to you on this thread to the effect that should the next Strachan well drilled by Apache NOT be located precisely as per the original agreement (i.e. the terms of the agreement are altered), then we shareholders of the sisters need to be very concerned. I want to ensure that you see that suggestion for what it is, PURE CRAP!!! The suggestion is irrational because requiring Apache and the sisters to proceed EXACTLY per their original game plan is akin to saying that they must ignore absolutely everything that they have learned through the drilling of the first $4.5-5.0 MM well!!! I prefer that management of companies that I invest in always make their decisions based upon the most complete and current information available to them. [If there's a good reason for changing the location, then change the damn location!!!] Recognizing that all parties to the farmout agreement (i.e. not just Apache) would necessarily have to consent to any deviation from the original game plan, I would view a change as being justified and in the mutual best interest of all parties. Reading anything more than that into a location change would be quite ridiculous, IMHO. Later, grayhairs P.S.- Quite some time ago I stated that the next well may NOT be drilled at the first option well location. I still believe that may be the case because there is an alternative earning location which makes more sense (to me, anyways)!!

To: Diamond Daze who wrote (568)	7/14/1998 12:27:00 AM
From: RIK	Respond to of 754

The management of the Strachan companies WILL make decisions based on the most complete and current information available to them. At $5 million a crack you can bank on it !!! They will NOT drill option parcels that do not have potential. For example , let us assume that the First Option Block (which offsets the 3-22 discovery well ) does not warrant drilling ; if all the parties agree the farmout agreement can be amended to change the order in which option blocks can be earned ( or whatever ). Should this amendment actually take place , it would be reasonable for an investor / speculator to assume that the joint venture partners have written off four sections (2560 acres) of petroleum rights immediately offsetting a rumored deep gas discovery. Therefore NO GAS reserves on these lands. Possibly the Second Option Block is equally unattractive..........there are many different scenarios. Chris , be very , very cautious if they change the terms of the original farmout agreement!!!!

To: Diamond Daze who wrote (568)	7/18/1998 3:38:00 AM
From: grayhairs	Respond to of 754

Hi Chris, Thought I'd give you something to ponder on the weekend. Suppose that Apache et al announce that their next deep well will be drilled on Option Block #4. How should investors interpret this? In particular, should we conclude that Option Blocks 1, 2 and 3 do not warrant drilling and should be written off? Unless investors know the precise terms of the farmout agreement, it would be difficult to conclude that Option Blocks 1 to 3 do not warrant drilling simply because Apache et al announce that their next location will be on Block 4. For example, it is possible that the farmout agreement refers to the various Blocks numerically only for purposes of identification. Perhaps Apache's option is to drill and earn ANY block of its choice. That is, perhaps there is no current obligation to drill block 1 before block 2 and so on. So, if Apache elects to drill Block 4, should investors be concerned? Has the agreement been amended? Should we write off the potential of blocks 1 to 3? Consider another scenario where all 4 option blocks may have equal reserve potential (in the eyes of Apache). Also assume that block 4 offsets the largest parcel (or the most prospective parcel, or the only parcel) of lands available for acquisition at a future sale. Would it be reasonable to conclude that Blocks 1 to 3 do not warrant drilling just because Apache may spud a well on Block 4 to better evaluate the prime offset lands? For further thought, what can we reasonably conclude if Apache drills a shallow twin to the 3-22 well?? And, what might we conclude if they do not twin 3-22 but drill a stepout shallow well instead?? Later, grayhairs