gas can smell lovely when it's flowing, page-14

Hello Microman,
It's hard for me to answer your question as I know squat about MOS. Having said that we are not comparing apples with apples in terms of market cap. ECU would have to go to 15c to be equivalent to MOS in the first place. I don't even know what sort of gas MOS is involved in..........I assume offshore??
Perhaps ECU will have more certainty about it once commercial gas is flowing. The current fields of interest contain an estimated 800 billion cuft of gas and very roughly speaking this can be exrapolated across their whole ATP which contains trillions of cuft of gas . ECU have brought 5 wells online successfully in very quick time and the coal in the ATP is very uniform so there appears very little question about recoverable reserves for many decades.
Gas is also not as easy to sell as oil and I don't know how MOS fare in this area. In coming weeks it is possible that ECU will have long term deals stitched up with some major buyers. Until that happens there will be some uncertainty surrounding any gas business. PSA for instance can sell their production basically as they please in the GOM.

If ECU comes together as I feel it will you will have a business capable of producing large quantities of gas with a high degree of certainty for many decades. It has very high prospectivity for oil in the ATP also but that will have to wait until the cash is flowing from the gas operations.

I haven't really answered your question I'm afraid as I don't know MOS. As far as funding goes the MD has millions of 4c options to excercise before the end of the year and that will happen and provide further funding. I know they will be loathe to have further capital raisings and I would be hopeful that the cash flow from the gas (as of early 2004) could fund further development.

In terms of potential profit there is every chance of 100 wells running concurrently in the Rodney Creek field at $5k/well/day. If you allow for a very conservative 70% of that going in costs (I don't think it will be anywhere near that but you never know) then you are looking at profits down the track of $50+ million. Even with the 10 wells they expect to have running mid 2004 that's 5 mill. It's very hard to do sums when you don't know what the cost structure/possible dilution is but you can see the potential.

Cheers,

Ed.