cgwhi1,Thanks for the informative reply. If I work on a...

cgwhi1,

Thanks for the informative reply.

If I work on a development cost of $500K per well plus other company costs, to get these 8 Clear Creek wells into production, this adds up to $4 million (if they can keep to this budget). The recent admin costs have been $1.3 million per quarter. The forecast production costs of Ridge Runner is $560K per quarter.

The plan is to have as many of these 8 wells producing by December as possible and the gas price will have increased by then due to the northern hemisphere winter.

So doing the sums for the costs up to Dec 2010;
Development costs- $4 mill.
Admin for 4 quarters- $5 mill. (maybe this can be reduced).
Current production costs - $2.3 mill.
Production costs for RR and CC- unknown.
Water disposal costs- unknown.
Other costs- unknown.

Plus debt repayment to Sep 2010 is $10 mill.

On the revenue side:
Oman Well producing 280 mcf/day and expected to increase. This equates to about $35K per month (and increasing?).

Ridge Runner Wells forecast to produce 7 mmcf/day from late April. This equates to about $1 mill per month (and increasing?).

Clear Creek Wells forecast to produce later in the year if all goes well.

So looking at just the well development, admin and debt servicing alone. This adds up to outgoings of $19 million by Dec 2010. The forecast revenue falls well short of what is needed. This means there must be another Share Placement and probably an increase in the loan facility and sooner rather than later.

Any comments/corrections on these numbers?