Technical Analysis, page-108

I'm not sure that's really what we NEED TO KNOW going forward Laz.

Yes we need a quality operator that's not going to stuff about.

But its more the overall deal and what 88E gets from it.

Just one thing before I go on.

Returning to the potential of ConcoPhillips, if we changed the cost metrics down closer to $40bbl which is WELL BELOW their cost metric limit of $60bbl for ongoing efficiencies I'm thinking this project could get bumped to a STRAIGHT START UP for them. It would certainly be a project that would be right at the top of their list.

Now with all that they have up in ALASKA .......?

This WOULD be a likely scenario if oil was to stay between $45 to $50bbl for the next two years which its seem it will do given the ability of the unconventionals to come on line quickly.

This would obviously only be a possibility IF 88E's costs are down around the $40bbl break even.

End of the Conoco talk tho.


We have chatted about Daves model and his comments re a MC of about $450M to $500M.

Now if we do a quick analysis of the Icewine play structure in relation to number of wells I think the company mentioned around 10 to 15/20 wells at $35M a well.

Now that comes out to be funnily enough $350 to $650M+

Interesting then that the MC metric Dave has his financial model at being right in the middle of this range.

I think whats going on here is that 88E need the MC to be at a similar level so that any Farm-in partner sees the company valued AT LEAST as much as what they might have to put in to this deal.

However one has to question whether this MC is really enough given what we think they have in-ground.

As far as actual Farm-in partner goes they will certainly be carefully chosen as much rides on this deal and as you have mentioned it will pay to have someone mid tier that's motivated.

I think if we were to investigate those mid tier Lower 48 operators that are short on low cost reserves then we may just come up with a potential short list. They wont want to be stressed financially tho. Not too much debt and a good debt rating.

Well that's a start isn't it Laz

d.