Ann: Capitola Oil Project Operations Update, page-2

Pretty encouraging announcement in my view, but not likely to set the world on fire in the ST given overall sentiment in the O&G sector.

Noting that the development costs for the three wells drilled to date are already ‘sunk’, if I’m reading the announcement right we make about $35 a barrel ($47 POO - $12 cash operating costs) for these three wells. We'll make more like $17/barrel from any future wells taking into account the finding costs.

Assuming 60BOPD from each of the three wells (180BOPD), cash flow will be $2.3m over the next twelve months from these wells alone.

Ignoring other wells we might drill, with $8.4M in the bank, that makes our total company value something like $10.7M. Over 950m shares, that equates to 1.1c per share with potential upside from oil price increases, future drills and/or acquisitions.