Grieve 35% - 8.6 million barrels to 2P at Grieve, one only needs to assign a $15 per barrel and his would provide ELK's 35% free carried ownership a value of over 50 cents a share (Grieve alone).
Grieve Pipeline 100% - ELK to earn a very handsome royalty which based upon the conservative estimate of 18.6 million barrels yielded this adds 10-15 cents to the share price. The environmental approvals clearly define that oil can only be transported via this pipeline due to environmental concerns.
ELK placing the Grieve assets forces Denbury to either pay for the pipeline (circa $10million) and the remaining 35% (circa $95million) or risk having to deal with another JV partner (Devon, Anardarko or ConocoPhillips) who will not be the little brother that can be pushed around that ELK has bee.
Add to this the value of Ash Creek which could yield 3 million additional barrels through a low cost chemical flood and you can understand why ELK is attempting to make he aware of its assets value through a competitive bid process.
Furthermore, the EOR Syngas deal that ELK has could be a very lucrative proposition. The patience is soon to be rewarded for the long suffering shareholders who have seen his potential since 2006....
Also, all of the above based on $95/barrel. Who knows where it will be over the follow years with trouble in the Middle East....
