heavy oil and fundamentals, page-3

Rick99

re Steam, yes quite right. No more wells but you need the steam injection plant which runs of gas, prod'n will continue at fairly low rates.

re margins, don't forget Salinas has 800k of admin costs per quarter. At this stage you can only go from the March 1/4ly c/flow (rev $2.8m less prod'n costs $1.5m less admin $0.8m less % development to expense, say (guess) $0.5m = break even for that 1/4.

Sure sales will have only averaged say $90pb for the period.

At rev of $130pb and the flow rates from the two new wells, there will be good short term profit for them.

In assessing the long term value proposition of the company I don't pay much attention to the initial headline production (though the traders will).

I'll be carefully watching the rate at which those wells produce in say 3 months time and their ongoing rework costs.

PE