CALIMA ENERGY - Positive Outlook, page-25

As pointed out above , in energy potential, 1barrel of oil is roughly equivalent to 6000 Cubic feet of gas or 6 mcf of gas so if you apply the gas price per mcf you get the BOE equivalent price of gas.

For example, currently WTI is at~ US $ 86 and HH gas is ~ US $ 3.1 per mcf. Therefore 1 BOE gas sells for ~ 6x $ 3.1= US$ 18.6 . For 1 BOE gas to be price equivalent to 1 barrel of oil, the gas price would need to be 86/ 18.6 or ~ 4.62 times higher at $3.1 x 4.62= ~ US $ 14.3 per MCF.

When one quotes in ground value of reserves of oil and gas reserves you need to seperate the oil and gas and sum the individual totals, but more importantly, you need to calculate the NPV ( Net Present Value)of each, and not just apply the current oil/ gas price to the reserve. You cannot just say a 20 million barrel oil reserve is worth US $ 1.7 billion at US$ 85.

It takes money to develop the reserves , costs money to produce the reserves and the reserves are depleted over a period of time, so the NPV Calculation takes those factors into consideration utilising an interest rate component. You can google how to calculate NPV and apply an appropriate discount rate.

In addition, reserves are usually multi factorial, depending on degree of development. PDP ( Proved Developed Reserves) are worth more than PDNP ( Proved Developed Non Producing Reserves) which are worth more the PUD ( Proved UnDeveloped) Reserves etc.

Cheers

Dan