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Technology Stocks : OILS - OTCBB: bringing stranded natural gas to market -- Ignore unavailable to you. Want to Upgrade?

To: Nextnet who wrote (175)	4/26/1999 8:08:00 PM
From: John S. Baker	Respond to of 275

I like your description of your DD process <grin>. Actually, it's quite similar to mine. "So, in the mean time, I'm holding my cards and trying not to be too concerned with the wild fluctuations in price. I'll let the traders worry about that as my time frame is usually more than a hour, a day or a week." Brad and I and several others have been through this process before, most notably with RNTK when there were day trader rumors every three months or so regarding of a really "big deal" ... which eventually ended up in the Texaco deal which may eventually produce notable revenues. As far as GTL, in general, is concerned ... I have fond hopes that this will eventually be a win-win-win situation for investors, big oil companies, and the environment in general. Happy Due Diligence. JSb.

To: Nextnet who wrote (175)	4/27/1999 5:08:00 PM
From: Bradpalm1	Read Replies (2) \| Respond to of 275

"I am, however, a very diligent independent investor who believes in doing stringent DD before making investment decisions." Wow, then I found the right person to ask! I didn't realize that your investment acumen was so formidable. You've most likely already looked into these details and can answer these questions without blinking an eye. BTW, these are also questions any institutional investor would like to know. 1. We hear a lot about OILS syngas generator yet details are sparse about OILS FT reactor. Since you stated that OILS doesn't use a slurry reactor, I'm presuming then that it's a fixed bed reactor using a proprietary chain limiting cobalt catalyst. That would mean that this reactor would most likely produce large amount of gas, probably methane, instead of the desired GTL product. Can you tell us what OILS intends to do about this significant ‘methane slip'? Do they intend to recycle the methane into another reactor to raise the conversion rate or will it be used to produce electricity via a gas driven turbine? 2. As you're probably aware, Shell had to reconfigure their fixed bed reactor design partly because of the efficiency problem mentioned above and the inability of this type of reactor to work effectively at a commercial scale (5000-10,000) barrels per day. Has OILS constructed anything that's produced more than 4-10 bpd? Are you aware that no major company will even contract to fund a commercial scale project until a technology has proven it can successfully run at 100 bpd or more? Do you have any idea how long SYNM and ARCO have been working on their 70 bpd project and it's STILL not operational? If all goes well from this point forward with CRL and Renaissance on construction of a demonstration plant in Alberta by November of this year, are you aware that it'll most likely take another 6-8 years before a commercial-sized plant can be built and revenues for OILS GTL technology could be realized? Is this the timeframe that OILS is anticipating? 3. Fixed bed cobalt reactors are not only inefficient, but they're much more expensive than slurry reactors and more difficult to clean and service. With fixed bed you need 2 reactors in case one breaks down because it has to be shut down while all that toxic cobalt is being removed and your backup reactor has to go online. Fixed bed reactors are also bigger and unwieldy than slurry reactors so where's the cost savings here, especially if you need two to operate your plant? OILS may not infringe upon Exxon's cobalt patents, but it appears that its FT reactors are more expensive to build, maintain and operate. This sounds like no bargain to me. What's OILS answer to this? I'll start with these, Nextel and wait for your quick and definitive answers. After all, we don't want to disseminate any misinformation to potential investors….do we now?