the best is yet to come

On the 6 Sept 09, I posted the following:

"Can't believe people are selling now!. Isn't it a bad idea to buy high and sell low or in this case at nearly the lowest price? Final Investment decision for Grieve is only less than 2 months away (October 09). Surely after holding for years, a 2 month wait is not too bad especially since the potential upside is a lot bigger than the downside(since we're already at near all time lows).

Phase 1 of Grieve alone is expected to recover between 2.8 to 3.7mmbbls. As Chemical Flooding is expected to be profitable even at 40/bbl, it is conservative to assume that Phase 1 alone should generate profits of between $78 million and $103million using the current oil price of $68/bbl. Compare this with the company's current market cap of $13 million and surely you'll start to see the light at the end of the tunnel.

In fact if Phase 1 is successful then Chemical Flooding could potentially recover up to 15mmbbls. That's $420 million. Now that, IMO, is definitely worth waiting 2 months for."

Since that post, the oil price has risen to $76/bbl. So now Phase 1 of Grieve alone should generate profits of between $100.8 million to $133 million and the whole Chemical Flooding project at 15mmbbls could recover $540 million (Not discounted to present value).

Even at the current price of 31 cents, the market capitalisation of Elk is still only around 30 million which is only 5.5% of the profit potential of Grieve. This doesn't even include Hereford, Niobrara or Ash Creek. The share price has a long way to rise IMO to reflect it's true value/ potential.

When I posted the above message on the 6 Sept 09, the Elk share price was 13cents. It has since risen to 31cents today (a rise of 138%).

So once again, i'll remind all Elkers, final investment Decision for Grieve is expected towards the end of October/ early November. Hopefully this time you'll at least hold off on selling your shares until then.

Good luck to all Elkers and well done to all those who were patient and/ or added to their holdings before the recent rise.