where are we at...

It would appear ELK received around $15bo during feb down from around $18bo Jan at SDS....costs i beleive are around $20bo....which means this quarter we are likely to be subsidising americans oil consumption by around a $1000 a day......I suspect at some stage we will need to pay Surtek...$2mill at the start of quarter less current quarter leaves us with ....not much....Gives us another quarter of doing very little before cash levels get critical....

Oil prices in Wyoming are trading at a massive discount to the rest of the US, I beleive due to lack of pipeline capacity.....So ELK realistically are at the mercy of wyoming oil prices....at current prices our projects range from sub economic to barely economic.....JVs are only feasible as long as partners expect future oil prices to rise and thus be more economical........we can wait a couple of months, possibly not a couple of years...Could ELK end up going under???? ....that might sound a bit alarmist but when you only have 6months cash, production is actually hurting you and projects are bordering on uneconomical then that may be the outcome...I fully expect oil prices to rise but exactly when and how much of a discount is the million dollar question .....with the global economy crashing at a terrifying rate I wouldnt want to see the company punted on the wyoming oil price rising in the near future.....

I really think ELK need to sign of on at least 1 of the JV projects to take the pressure of on the cash front....I also noticed in the Surtek presentation that Andy mentioned ELK could potentially fund the pilot project themselves.....Debt or equity + debt????? From my point of view that was a crazy statement to make...ELk cannot fund it...Realistically ELK doesnt have enough cash to even fund the core well......personnally i would hate to see ELK punt the whole company on one project, which is exactly what would happen by taking on that amount of debt, and equity would be very destructive......

I would hope ELK come through with a JV this month as they are meant to be starting drilling by April....if not then one can only assume that the industry are not interested in the projects....

ELK need to sign of on a deal or 2 in case the industry deteriorated further and deals were not there to be had....I think the low prices put on the exploration acreage is evidence that the industry has deterioated significantly......even though the prices asked are very low that would appear to be where the industry is at and we have chris who is able to source new projects if they can get some cash for him.....so it is a good thing to go and farm them out..

The next few months are likely to define the prospects for ELK long into the future..
Cheers