Ann: Strong Oil Flows Exceed Expectations in Texa, page-89

re: Ann: Strong Oil Flows Exceed Expectations... NPV is the net of all expected Revenue less all expected expenditure discounted back into todays dollars.

But it is better than that as, from memory they discounted those cashflows by 10%. In otherword a dollar is losing 10% of its purchasing power each year.

The reason they use such a high rate is this is the rate of return you believe you could get on a competing and usually risk free investment.

Further its even better, given that the vast majority of your expenditure occurs before you have received a cent of revenue, so effectively your expenditure is in real today dollars but future years revenue is greatly reduced by the dicounting effect of the calculation.

Long story short the $7mil NPV is a very conservative number if they hit the production figure it is based on.

I assure you there are super profits to be made in the EF if they hit the production figures they are hoping for, Richard Cottee has not showed up on a whim.

Further its worth checking out my Niobrara thread the EF is just the beginning. Like they have chosen land here over the highly productive giddings field for EF development , they have chosen land over the highly productive Florence field for Niobrara development.

These guys are well ahead of the curve !!!