Ann: Shari Lynn Reaches Target Depth, page-22

Just a splurge of random information and ideas/questions:

"Capitola Oil Project areas, it is estimated that there are several million barrels of remaining recoverable oil from the three primary sands targets. The Project presents a large number of targets with up to 200 vertical locations for Canyon Sand objectives and 60 horizontal well locations ready for drilling in the Cline Shale"

"Under the terms of the Capitola Project Farmout Agreement, PYM has the option to earn up to a 75% WI in all mineral rights from surface to the top of the Cline Shale (the Shallow Rights) and up to a 50% WI in all other rights including the Cline Shale (the Deep Rights) in the entire 9,333 acres under lease, through a 10-well drilling program that was broken into 4 phases." /.../ "PYM has elected to limit its earned interest in Capitola to 45% in the Shallow Rights and 30% in the Deep Rights."

I'm still not 100% convinced on their decision to limit the WI was the best decision for the organisation going forward? Considering we are going to be spending a lot more money and time developing the Capitola Project, it seems a shame to limit out upside to such a 'standard' WI...? Considering we foot the bill for the well and play a lease for the land, it just seems unfair that the company (and shareholders) get so little return for taking all the risk... or am i seeing this completely incorrectly?

I wonder if management have tried to sell our four rivers assets at all?

Objectives of the Capitola Oil Project:

"PYM’s initial objective is to drill vertical wells and produce from conventional zones above and below the Cline Shale. Revenue from production from these wells will support subsequent exploration. It is intended that the initial wells will penetrate the Cline Shale to gather data in support of a horizontal drilling program."

"A vertical well drilled to 6,000ft, tested and completed for production from the Breckenridge Lime and Canyon Sands intervals, would typically cost c.US$950,000 and is expected to produce from 50,000 to 140,000 boe over its life, assuming an initial production rate of 60 to 140 boe/day from the primary targets."

I wonder what the going rate is now in the market for a standard vertical well?