dont understand why, page-17

There are probably two contrasting view points in the market at the moment:

1. This is a company with a potentially very large gas resource that we should know much more about within the next month or two. They have applied for permits, etc on the assumption that this well is commercial. They are about to spin off what will be a fairly profitable uranium producer in the next year. If their potential is even only partly reached, they are currently incredibly undervalued.

2. The management has invested a big part of their company in two gas wells in Utah that have been mismanaged to the point where the drilling schedule has over run by 300% and they are burning cash like it is going out of fashion. Though they have had a few hits, these are yet to be tested and are not necessarily even commercial. Their main target, Leadville only registered a MINOR hit and it looks like it will be barely commercial. To take the market's attention of the poor well, the company has spun off its uranium interests because that is the hot sector at the moment.

In the last week, I think the market has fluctuated between these two opinions. At the moment, obviously more of #2. The only thing to change that will be a successful DST and further gas hits down the hole. Once flow testing has been completed maybe then this company will be valued at closer to where many of us believe it should be.

I think HC has contributed to the manic-depressive way the market is acting. Hanging on these forums just makes it that much harder to try and remain unemotional. That said, though there are definitely no certainties, this well has to only partially fulfil potential to be severely undervalued. At the spud, it was expected there was a 20% chance of a midpoint find of 440 bcf, which would take the value of the company to around the $10 mark. Everything that has happened since then, despite delays, has indicated that this is now even more likely. I will continue to try and remain impartial on my view of this company, as hard as that is when you read some of the crap on this site from both sides, and hold until the well is a duster (unlikely) or it gets somewhere close to what the real value is.

Todd