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

To: Ed Pakstas who wrote (515)	12/7/1998 4:25:00 AM
From: Kerm Yerman	Respond to of 15703

Ed - Check / You both are correct You are both correct. U.S. companies use 6 mcf and Canada uses 10 mcf. to determine 1 boe. Why the variance? It is the NG price realized by companies in their respective countries. Canada is in a state of change brought on my construction of new natural pipelines which will provide for greater distribution to the U.S. The variance in natural gas prices between U.S. and Canadian companies is narrowing. Quite a little documentation at Kerm's Korner on this subject. If you go back to your calculators, the price of natural gas to use is "a conservative" $2.20 mmcf (as Rick mentioned quite some messages ago. In the past three weeks, Canadian companies were obtaining forward gas pricing contracts between $2.50 to $2.60 mmcf. Also, based upon the resavoir size you wish to use as a number, use a "conservative" 50% as the portion which will be recoverable. Even though the recoverable amount will in all probability be very much higher, use the number that will be built into their (companies) financial reporting. That's the number analysts will be utilizing.