What a day...And truly didn't expect it to go down this...

What a day...And truly didn't expect it to go down this low...

Yeah, Moeller 1 didin't turn out as expected but then again, but what tomorrow holds is always uncertain...

Been reading the comments here...Lots of talk about gas but no one actually highlight the significance of condensate/oil.

And I thought maybe it is a good time to highlight it...

---------------------------------------

Please point out anything that I might have missed from the research below.

Here we go...

Based on the BUR research report

http://www.burlesonenergyltd.com/documents/Burleson%20Energy_Ltd_Research_Report_%20June_2010.pdf

and my calculation of cash that will be coming into BUR assuming Moeller 1 is a complete failure and B1, H1, J1 and W4 are all success (success here means achieving the expectations as described in the investor presentation).

So currently B1 is generating $15,000 per month for BUR. Flow rate is at 380mcf/day...
That equates to about $1.31/mcf/day.

Now assuming H1 generates flow rate as expected (3000mcf/day), this equates to about
3000mcf x $1.31 x 30 = $118,421/month

If the same expected flow rate is applied to J1 and W4 (as described in the research report), each will generate the same amount of $118,421/month

Totalling all the gas revenue from these 4 wells gives BUR a revenue of:
$15000 + $118421 x 3 = $370,263/month (~$4.4mil/year)

-------------------------------------------------
CORRECT ME IF I AM WRONG. The calculation above excludes CONDENSATE/OIL.

According to the report, if we apply the flow rate of 200 barrels of oil per day for H1, J1 and W4, factoring in the spot price for condensate at the moment which is about $72/bbl, the amount of additional revenue to BUR will be:

200bbl/day x 3 x 30 x $72 x 63%* = $816,480/month (~9.8mil/year)

* where 63% is a typical indication of a return from the spot price of per barrel of oil excluding operational/transportation expenditure

---------------------------------------------------

So, assuming all 4 wells goes as planned (excluding Moeller 1), is this the annual revenue we are expecting?

9.8 mil + 4.4 mil =$14 million/year ?????

Please do correct me if I am wrong...

----------------------------------------------


Note that we are only talking about B1, H1, J1 and W4 excluding M1 and Woppa...

From what I can gather from today announcement, there is a possibility of recovering some gas from M1...To what the amount that is recoverable, only time can tell...

Note that I'm only highlighting the flow rate and not the amount of gas...as my concern is more on how much cash can be generated given a fixed time period....

Another thing to add is BUR has just acquired 70+ prospects in this same Colorado county and not to mentioned there is the Edwards and Sligo well to dig by end of the year (if farm in partners are found). They have about $3million dollars of cash currently but half of that, $1.5million will have to be repay by end of the year....

What do you think? Is this stock way undervalued because of the domino effect of panic and fear or are we seeing a real correction ?

Any comments???