salinas valuation significantly higher, page-15

Granger, the key differences in valuation stem from your cash flow method verses a reserves valuation.

Junior oilers are valued most accurately on reserves. once they have 4 or more producing fields cash flow and even traditional pe values can be used. (exceptions might be a stock like AED where the first field is huge)

Like wise there is a difference in the use of flow rates. Steam injection fields have high variable flow, peaking immediately after injection, then falling until the next injection. Therefore using the full production capability of the infrastructure as an average for an extended period does not reflect the actual production characteristics.

If the facilities can handle a peak of 2000bopd, then average production in the course of a year would ideally get to 1500bopd.

That would give a 45-50c valuation as things stand right now, however there is a lot of upside.

As Ricky suggests, there is more than likely going to be an upgrade at NSA which on Rickys figures would easily take the valuation to 60c. As you point out further drilling at NSA may also enhance this.

NY which is yet to have a proven value has a great deal of potential once or more wells are drilled.

Their remaining exploration acreage appears extremely good and will no doubt lead to further discoveries in the not too distant future.

I can certainly see a $1 on the Salinas horizon.