Not from Warnie's mouth but from some bloke/Gal on SS
Below
Hmmm ....
Be careful ... whilst if it was proven the claims this company I would agree is undervalued but not to a massive extent since what the propose is expensive and frankly I have serious doubts about it. SERIOUS DOUBTS ...
Why ?
Once a company goes down a slippery slope of releasing an estimate backed by some consulting company which is not backed up by actual drill results or reads more like some vitamin ad which claims to take 20 year off your age guarantee a girl who looks like Megan Gale will be attracted to you ... alarm bells go off at least for me.
Worse is when the company in question has something similar in its not too distant past ......
I have one rule with specs .... if you cant trust them you never should ... ever again. Of course they cannot guarantee the results of a drill or that something is down there.
IDITIC thing about the current rise in ELK it that it has risen yet again on some obscure report claiming if they spend a lot of money flooding the old field with CO2 there is an assured pot of gold at the end.
My TOTAL and complete skepticism on this front is not sour grapes but based on the fact that its not the first time a report has been released by this company .... just like this ....
All an aside ... its a puny little 20 mio company ... really dont give a damm about it but having looked at it in the past and had it suggested for the Small caps stocks and then again several times for the massive reserves small caps thread it has left me stone cold on both occasions. That the current CLAIM and thats all it is ... a claim unproven till something concrete is produced ... rings like past claims of this company or any other ... yet the stock has more than doubled in price this time with feverish posting on another web site well known as the pump and dump center of the universe just scares me even more for the fresh batch of punters about to back a 100/1 shot with odds on the payoff being maybe 3/1. Sure it has a chance .... every company in this field I suppose does but the track record of claims vs actual reality has me scratching my head as per normal as to why this current claim is being believed.
this says it all ....
14th FEB 2006 , 18 Months ago ...
the claim !!!
QUOTE NEW HYDROCARBON RESERVOIRS IDENTIFIED The Company is very pleased to announce the identification of new hydrocarbon reservoirs located within the Upper Sand Units at the Grieve Oil Field in Wyoming USA. The Company has received an independent report from MHA Petroleum Consultants, Inc (MHA) of Denver, Colorado confirming the Company’s belief that significant volumes of hydrocarbons are present within the Upper Sand Units. MHA has estimated the original oil in place (OOIP) in four of the Upper Sand Units of approximately: 51.4 Million Barrels. The OOIP is derived from recently completed RST well logs (with carbon-oxygen mode run on selected identified zones of interest), in conjunction with the re-analysis of historic well logs. Confidence in this assessment is enhanced by hydrocarbon shows reported in the Upper Sand Units during the drilling of historic wells, production in these horizons in nearby oil fields, and by recent oil shows observed by the Company in a number of temporarily abandoned wells. The Company will now undertake an appraisal programme to define proven recoverable reserves for the Upper Sand Units. The historic oil recovery from the currently producing Muddy Formation OOIP is approximately 35% with total production from the Muddy Formation of approximately 30 million barrels of oil. Equivalent recovery rates in the Upper Sand Units reviewed by MHA would result in recoverable oil of approximately 18 million barrels of light sweet crude.
And the results .....
QUOTE Last year the company undertook to test several of these upper sand formations in three existing wells. The first well tested the Lower Sussex Sand. It found no significant traces of hydrocarbons. The second and third wells attempted to test the 1st and 2nd Frontier Sands. The results from both of these attempts were inconclusive due to mechanical difficulties in testing these old wells.
Then they tried again ..... and the results .... you can look them up they are only a few months old. Same ... zero point zero zero.
Despite the hoopla and hot air ... what was the initial absurd claim ? 54 million barrels .... they couldn't even hit a decent oil show despite drilling a few holes supposedly on the best three targets.
Now they come out and claim there is not as much .... with their new consultants .... and the market goes nuts for the stock.
Oh please ....
Sure maybe they do hit something but the upside given the extreme cost of production that is likely to be the case with the CO2 flooding .... and the share price already represents a fair proportion of the real value were they to find what they claim this time.
Reality .... they raised 11.7 mio less than 18 months ago based on the first set of claims and to date according to the last cashflow report have spent nearly all of it for ...ZERO results .... its all gone.
Its likely the cash balance of the company as of the 30th Sept is under 2 mio which means its spent around 14 mio in 18 months looking for oil .... production last quarter was a puny 20,000 barrels and even at US$80- per barrel .... its less than inspiring and since the last wells the drilled were total flops despite the hoopla ...
My own call .... is a placement for a large amount at the now inflated price onto a new batch of punters backing the 100/1 shot with only 2 legs in race eight at the Dapto dogs.
The company has not a lot of cash left and at its absurd cash burn rate vs actual results ...
Hu Hum ....
I wonder whether some slick operator has been appointed as the person to raise a new slab of capital for ELK ? The capital raising is coming and when i see the price of some stock double on the back of .... not even drilling but another report claiming their is black gold down there its time to go watch the Beverly Hill billies reruns for several hours and lean the song ...
For those who don't know the words ..... hum it along as the lemmings buy ELK into the placement which I am sure is being arranged right now :}
Come and listen to a story about a man named Jed A poor mountaineer, barely kept his family fed, Then one day he was shootin at some food, And up through the ground came a bubblin' crude.
Oil that is, black gold, Texas tea.
Well the first thing you know ol' Jed's a millionaire, Kinfolk said Jed move away from there Said Californy is the place you ought to be So they loaded up the truck and moved to Beverly
