Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Kerm Yerman who wrote (324)	12/4/1998 8:45:00 PM
From: Salt'n'Peppa	Read Replies (1) \| Respond to of 15703

Kerm, It's funny that you should mention Arakis, as I spent 8 months working at the wellsite in Sudan for them last year!!! That is an unfortunate outcome for them, as they had drilled a lot of successful exploration oil wells in their very large field in Sudan, but due to the civil war, had no pipeline to transport the stuff. There is a huge amount of oil in the Heglig field. If the country ever gets sorted, Talisman is going to make a killing (no pun intended). But I digress.... I agree with you that this ELH play is most unusual. All the right elements exist for 1000 fold ultimate run-ups in the companies' respective share prices. As you say, the companies should not need to emplace huge equity issues, as field development costs should be largely funded by Bellvue #1. I don't know exactly how far away the tie-in to the gas pipeline is, but I know it is very close. I've been told by several involved sources that if the well is brought under control in the next week or so, it should be on production and generating revenues by Dec. 31. I would hate to hazard a guess as to production rates, as my area of expertise is "down-hole and pre-production", but I was told that it would produce at a minimum of 10 MMcf/day. I guess the restricting factor is the carrying capacity of the pipeline. I am confident that Bellvue #1 could manage 50 MMcf/day if required. It is my understanding that Chevron "owns" the infrastructure at ELH (pipelines, manifolds, refineries, sub-stations), so if they are getting a 25% royalty, it would be in their best interest to help finance a larger bore pipeline, if necessary. I don't know how the deal is structured, but their 25% revenue royalty should include use of the pipeline, so there shouldn't be any transportation costs to the Bellvue #1 partners. What a week it has been!