My interpretation on the conversation at Q & A time was that since the Denbury deal was signed Elk has been approached by a growing number of smaller lease holders offering deals of various sizes. I think part of the money raised will potentially go to aquisitions from this source. Great stock is being placed on the pipeline ownership and possible leases around it particularly north Grieve.
With relation to Ash creek, yes, there was dissappointment regarding oil cuts but more significantly some of the money raised will go to developing the field for chemical flood.(Davo raised the question whether the short fall in the cap raising would be offered, further diluting our shareholding)I think some of the $12mil required to complete the chemical flood will come from here.
High risk/high reward plays were mentioned but everyone had the opinion that we stick to attaining cash flow in the medium term.
Hereford 1 could be moving forward to produce onsite electricity but will only generate enough income to further develop the field ie further shallow drilling.
Overall, the projects are moving forward and at this time we are still on course to be CO2 flooding Grieve by April next year.We are still waiting for BLM and this will be the only holdup.
ELK Price at posting:
15.0¢ Sentiment: Buy Disclosure: Held
