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Gold/Mining/Energy : Daytrading Canadian stocks in Realtime -- Ignore unavailable to you. Want to Upgrade?

To: Ed Pakstas who wrote (870)	12/7/1998 2:25:00 AM
From: keith massey	Read Replies (1) \| Respond to of 62348

For everyone watching and trading the small gas fire I am reposting this from another thread to put things in perspective for day trading in the next couple of days and weeks. We are going to see some huge huge swings in the prices of the players involved. This report is fairly well written and is based on a 100 million barrel of oil discovery. Of course several writers and thread types are calling for 500 million to 1 billion barrels but I won't believe any discovery until I see it. PACIFIC INTERNATIONAL SECURITIES INC. PI Daily Journal by Research Department December 2, 1998 Natural Gas Blowout—East Lost Hills Bellevue #1 Well, California Participants in this exploration well near Bakersfield, California, include eight Canadian companies; including sev- eral junior companies, with varying minor interests. On November 23 rd , a high pressure gas and condensate zone was encountered at approximately 17,600 feet, and the well blew out and ignited. A well control team from Boots & Coots of Houston, Texas, is currently on site. The well was still burning at last report. The continuing fire and blow-out suggest that an extensive high pressure reservoir has been encountered; however, evaluation of the reservoir will not be possible until after the well is under control. It is ver y likely that extensive damage to the existing well will require that a second well be drilled in order to access the reservoir and this will be a costly, time consuming procedure considering the depth of the well. In view of the considerable market interest and trading activity in the companies involved in this well, we have completed a preliminary evaluation in order to illustrate the var ying leverage to the play for each of the companies involved. Assumptions made for the purpose of the evaluation are a recoverable reserve of 100 million bbls of cr ude oil (approximately equivalent to one trillion cubic feet of gas), value of US$4.50/bbl and exchange rate of $0.65. The purpose of this evaluation is to illustrate the leverage potential for the various companies and does not imply actual value since there is presently insufficient information regarding the pay zone and reservoir. (However the prospect was initially estimated to have potential reserves in excess of 1 billion barrels of recoverable oil; therefore 100 million bbls or more is not outside the realm of possibility). East Lost Hills Bellevue #1 Well Company Symbol W.Int. Net Int. Shares Incremental Curr. % of O/S Value/ Price Curr. (mm) Share Mkt. Price Berkley Pete T- BKP 20% 15% 73.8 C$1.40 $10.15 14% Elk Point Resources T- ELK 10% 7.50% 21.9 $2.37 $3.90 61% Paramount Res. T- POU 10% 7.50% 56.9 $0.91 $14.85 6% Westminster Res. T- WML 10% 7.50% 19.7 $2.64 $5.65 47% Richland Pete T- RPL 5.00% 3.75% 12.6 $2.06 $2.65 78% Kookabara Res. T- KOB 6.56% 4.92% 17.2 $1.98 $1.20 165% Hilton Pete V- HTP 6.56% 4.92% 7.4 $4.60 $3.54 130% Stanford O & G V- SOG 6.56% 4.92% 12.9 $2.64 $1.60 165% Pyr Energy PYRX 10.50% 7.88% 9.2 US$3.85 US$2.25 171% Assumptions: Reserves of 100 million bbls. Valued at US$ 4.50/bbl Exchange Rate at $0.65 Share prices as of market close on December 1, 1998 As can be seen from the above table, the most highly leveraged companies are the juniors with relatively small market capitalization; including: Kookaburra, Stanford, Hilton and Pyr Energy, which is a US OTC Bulletin Board stock. Others with good leverage are Richland, Elk Point and Westminster; each of which have fairly significant additional oil and gas assets and value. There is likely to be considerable ongoing speculation as to the potential value of the East Lost Hills well and there is also likely to be some considerable time (and costs) expended before a reliable evaluation of the reservoir is ob- tained. In the meantime, the speculative trading will likely continue, but in the absence of many reliable facts. Best Regards KEITH