It was encouraging to see that the game plan has not changed and that management is making progress. $2M in the bank is good given we further increased acreage as per Davo's post in the quarter.
Interesting to note that CO2 was back on the agenda. We know that the Uni prelim results for chemical flood was positive and the NPV was similar to the NPV with CO2. My take on this is that previously ELK was a price taker for CO2 and couldnt get a contract on terms that was satisfactory for SHs. With the chemical flood being a viable alternative and Rancher not being able to take delivery of their contracted CO2, this could create a problem if the commission stops allowing the current venting.
Therefore ELK may have been approached on more favorable terms. CO2 is still a proven EOR technique, if we can get favorable terms I would all in for CO2.
cheers DJ
ELK Price at posting:
14.0¢ Sentiment: LT Buy Disclosure: Held
