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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: keith massey who wrote (6135)	3/5/1999 3:09:00 PM
From: Bearcatbob	Respond to of 24892

My quick calc is reserve at .50 per mmbtu divided by shares equal share value. Or another way is 10,000,000cfd is about worh 1000bbls/day + oil. Bob

To: keith massey who wrote (6135)	3/5/1999 5:41:00 PM
From: SofaSpud	Respond to of 24892

Keith / Omax Pretty tough to get the back of the envelope going on this one. Even if they are sitting on top of a good discovery, how close is the play to infrastructure? Gas is useless unless you can get it to market. Is there a pipeline nearby? It's one thing for a little company in Alberta to hit a well at a few thousand mcf/d if they're 500 yards from a gas plant; quite another if they're 100 miles from the nearest infrastructure. The reservoir has to produce enough to make it worth connecting, which might be an issue where Omax is in Ontario -- I don't know. Then you start worrying about production and decline rates, netbacks, etc. FWIW

To: keith massey who wrote (6135)	3/5/1999 7:11:00 PM
From: grayhairs	Read Replies (2) \| Respond to of 24892

Hi Keith, For scoping purposes, you'll get "stadium estimates" if you use either of the following: a) Proven Reserves (in the ground) valued at about $1.30/mcf with Probable Reserves discounted 50%. b) If you prefer to project the operating income use a residue sales gas value of about $3.30/mcf (assumes 1,000 BTU gas) and deduct your own assumptions for royalties (Crown, freehold, overrides combined of perhaps 25-35% of sales price ????), processing and operating costs (Combined only about $0.25 to $0.30/mcf ????). My guess is that you'll be looking at a wellhead netback of about $2.00/mcf which is damn nice !!! Infra-structure in Huron county is not a significant concern and the processing and operating costs should be very reasonable for this shallow sweet gas. If decent productivity can be developed, these little wells will "ring the cash register" very nicely. Good Luck. Later, grayhairs EDIT -- Do you know \ know of the OMAX management team at all ??