re: Ann: Permian Basin JV Extends Strikes US ... looks to me...

re: Ann: Permian Basin JV Extends Strikes US ... looks to me like we are paying $3.5mil for a certain cashflow of approx $1mil pa - I'd buy a cashflow like that!

The extra $7mil required for the 25-30 for low cost infills, behind pipe recompletions, refracs is a genuine cashflow concern but easily funded if borrowed against STX reserves - now massively upgraded!

What strikes (pardon the pun) me is that we sold Rayburn (a known project) to avoid the cost and project risk of behind pipe re completions and then we CR to buy into an unknown project with a planned $7mil spend on infills, recompletions and refracs??? Nevertheless, I do trust STX Mgt to assess a projects potential and they must see exploration upside otherwise why bother? Immediate drilling program is a big plus in my books, the research is done thus no waiting around!!

Thus far market seems unimpressed? Let's see what happens once the instos/analysts have had a chance to talk to STX Mgt, run their numbers and assess the project. This time next week will give us some more clues.

If they can achieve the 500bbl mark then that's going to be 125bbl @ $100per bbl x 365 days to STX which = $4.6mil gross cashflow pa!

I reckon that the back in clause will only apply if they exceed the 500bbl from field work over - Note I am guessing here.

Cheers

HC