elk x10 bagger by 2013

thank you Davo thought I would start a more representative thread (my heading)

Current market cap around $31mil.

Within 6 weeks.........
With the co2 contract in place up to 23mil barrels becomes accesible. A finance/JV deal expected within the coming 6 weeks which should significantly re-rate the company. Make no mistake a deal will be done with the party willing to offer the best terms. Ryder Scott put an NPV of over $300mil on Grieve at an Oilprice of $85US. Currently Nymex futures suggest the period of production will be at $100. Companies with these sort of reserves have market caps in the hundreds of millions of dollars once producing.


Ash creek has around 5mil barrels recoverable and should come online in the next week or 2, with 2 production wells, Elk are hoping for them to stabilise around 30bopd, however are likely to come online higher, based on expected flow rates and oilcuts #9 could be above 60bopd initially. Considering the lower Shannon has not been waterflooded then this should be a good performing formation. There are approx another 20 wells that could potentially be brought online. As part of the research into chemical flooding Ash Creek Elk need a core from the shannon formation, it has added upside in that the well is higher on the structure and could contain pure oil, It would not surprise me if this kicked of around april/may. Based on expected fluid flow rates from the #1 well of upwards of 400bopd, this well could be significant in dramatically increasing cash flow. If the first 2 wells perform to expectations then I expect Elk to move straight to the other 2 wells previously identified as 1st stage workover wells within the next 8 weeks.

Within the next 4 weeks......
Elk expect to have a feasibility study completed on Hereford. to access a net 15bcf of gas for power generation and associated Helium. If the study is positive it opens up a number of other drilling location and they can either market the project for debt funding/JV or sale.



Within the next 2 months....
Elk should have farmed out the Niobrara as they are expecting to be in a position to drill during Aus winter. Being a horizontal well with plenty of fractures you can bet the punters will get on board and give the shareprice a serious shove. Last time Elk did a verticle well punters added 30c to the shareprice. Grieve is 3000acres, $3000 an acre has been seen recently for Niobrara acreage.

Elk has around 30mmboe to be recovered with 90% of it being oil, so we are still trading at approx $1 a barrel. $4mil cash in the bank.

Cheers