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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: Roman S. who wrote (274)	12/1/1998 9:02:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15703

Roman-All / Still Speculative Until Final Analysis/Testing I'm excited about this play also. But, I try not to get caught up into the speculation that's going on. My feeling is that the well will prove to be commercial. But just how large a find we have here is really yet to be proven. All that we know at the present is that there is natural gas - to what extent is the big question. The fact that we have a big fire doesn't really answer that question. But it sure as hell provides an interesting story that will fuel speculation in shares of the companies for a few weeks and possibly further out in time. Here are some caution points I extracted from the article you referenced. ---------------------------------------------------------------------- The natural gas fueling the blaze is coming from more than three miles down, and if the fire is doused and the well brought on to production, it will be the deepest commercial well in the state. The well's owner won't release estimates of the amount of gas escaping, but it is massive. One longtime oil man said a very conservative estimate would be in the range of 10 million cubic feet per day. "The big question is, you may get a big flow rate but if you don't have a big reservoir you're done," said Claude Fiddler, who retired from Chevron in 1990 and formerly headed California operations for the oil giant. "The Lakeview gusher (a famous 1910 oil well blowout near Taft that flowed 9 million barrels of oil in 18 months), it gushed and gushed and made all that oil, but there wasn't anything after that." Lakeview sputtered and never produced another drop of oil. The Lost Hills find, so deep as to be in unexplored territory and so unique as to have the whole local oil industry abuzz, could be different. "These guys are in new territory. There's no telling what's there," Fiddler said. "I have not seen one burn as long as this one." ---------------------------------------------------------------------- I don't know if Elk Resources (Belevue) won't state the extent of gas escaping or if they have yet to determine it. I suspect the later. the estimate of 10 mmcf is stated as conservative. We have had upwards to 400 mmcf mentioned. Of the information stated thus far, I think 40 mmcf could turn out to be the most accurate. That's my own guess-estimate. As far as size of the reservoir, I do believe it is large, but being a monster reserve amount -- I just don't know. I do believe there is that possibility - based on original interpetation of the seismic work. The comparison to the 1910 oil well fire and what resulted can be downplayed. That fire went on for a period of eighteen months. We need to see this well capped as soon as possible. A relief well, if required, is not good. I believe that venture could take up to 13 weeks or even more before the gas is siphoned off, allowing capping of the fire well. And that's not 13 weeks from today. It will take another 1-2 weeks to determine whatever is required. Then there is the question of rig availability. I'm sure the company already is addressing this subject, but just how specialized is the equipment requirement. Bottom line is as I mentioned prior. This is one heck of a speculation for there is a sound foundation beneath the play at this time. However, don't throw caution to the wind.