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

To: Don Richards who wrote (2317)	5/2/1999 8:25:00 PM
From: Check	Read Replies (1) \| Respond to of 15703

Jesus Lonepine, could you possibly be more of a technopeasant than I am? <<ok,i think i found the report you were referring to re-yorkton apr.30/99 posted on the EJ site.Unfortunately I cannot access it with the system i have.>> It's there! It's there alright, you'll just have to ask one of the other cyberjockeys to show you how to retrieve it. :-) (I think this means a smile) But it's not worth it. They have the pressure at 8170 psi. My educated guess -( actually, I am a really dumb sod, but I can remember what educated people tell me, well, for now anyway)- is that it is closer to double that. <<I like your estimate for KOB shareprice better!!I don't know what the date is of the Yorkton reserve estimates that you are referring to... >> As for possible reserves, they have 4.2 TCF of gas and 109 MM of condensate. Off the top of my uneducated head, I'd slap a CDN $ 5 billion value on that. Off the same top, KOB has some 17 MM shares out, 20.5 MM fully diluted, but less than $500 M in cash. So if we conservatively assume nothing gets exercised, they'll need cash soon. Now if they hold out for the kill, the stock will pop a bit and they will not need to dilute the hell out of it to finance their share of the next well. Say 1.5 MM shares to tide them over until the cash starts flowing in. So if you take 4.4625% of $500 MM and divide it by 22 MM F/D shares, you get about $10.14 per share. Now, all their other stuff's got to be worth at least a nickle<ggg>, so $10.20 seems O.K. to me. You have yourself a good one too. CIO

To: Don Richards who wrote (2317)	5/2/1999 8:36:00 PM
From: Salt'n'Peppa	Read Replies (2) \| Respond to of 15703

Lonepine, the April 30 report is the correct one, and yes, they do have the reservoir pressure completely wrong. I think that this must be a typo, because 4.2TCF is within the range that some of the other JV partners are estimating at this time. If they did use 8,170psi in their calculations, then changing that parameter to 15,800psi (which is nearer the real value) will allow for vastly more gas to be stored in the available reservoir porespace. Remember, gas is highly compressible. Yorkton got several things completely wrong in this report: 1) They stated that it has been 4 months, but, as you point out, it has now been well over 5 months since Nov. 23, 1998. 2) The relief well will not be "plugged back with cement, and then drilled out" as they stated. The plan was to cement a metal liner in the wellbore, to around 16,500 feet (actual depth not disclosed). Drilling would continue from the base of this liner (the shoe). 3) As Check pointed out, Yorkton's "Exhibit 1" table is wrong. 4) The reservoir temperature may be wrong too. The Hilton presentation in late March told us that the reservoir temperature at the top of the Temblor was 324F, and the temperature of the water currently being produced was around 350F. This temperature difference lead to the most widely held theory of the origin of this water. Namely, that it is coming from quite a bit deeper in the Temblor. I'm not sure where Yorkton got their very high 382F measure from. I have no idea where they came up with a 20% chance of success on the ELH play. Personally, I would think that it would be closer to 80%, given what we have seen so far. Yorkton is giving a 20% chance of success that ELH will prove up 4.2TCF recoverable. I'd like to know their %COS on proving up 2TCF. Comments welcome. Rick.