Agreed Kerry, while a lot of time is being spent o
Post# of 2009
Posted On: 02/12/2015 4:19:02 PM
Agreed Kerry, while a lot of time is being spent on XOM and closing deals, I am sure they are keeping an eye on other aspects of the petroleum market.
As posted by Jerry in a response, there opportunities in the current price decline of WTI. Per a response from Jerry on the company forum (Under Falls Project Update Post #2 Response #2):
“With the current price of WTI, there are some great offers that have surfaced as a result of the lower WTI price. As stated earlier, oil and gas lease valuations are based on production, net cash flow from the production and proven reserves. With lower WTI prices, an oil and gas lease is now valued at 30% to 60% lower than what they were valued at a year ago!! Some oil and gas leases that were economical a year ago are not economical today with WTI price being lower than the production costs.”
Additionally, the Falls Project is still in play, just waiting on stabilization of the WTI price. Per a response from Jerry on the company forum (Under Falls Project Update Post #2 Response #1):
“The Texas Falls project has temporally stalled out. With the price of WTI dropping constantly over the last several months all parties, including the Company, pulled back and is taking a wait and see approach. The Texas Falls project will be revisited once the WTI price stabilizes. Oil and Gas lease valuations are based on production, net cash flow from the production and proven reserves. With WTI coming down, the valuation for the Texas Falls Project has dropped considerably and is not in tune with the asking price by the Sellers of the Texas Falls Project. Banks finance based on valuation and cash flow. If the purchase price is greater than the valuation, the Company has to cover the difference. Currently the Company is not in the position to fund the difference.”
It is apparent, IMO, that they are keeping an eye on the oil and gas industry as a whole, and staying aware of opportunities and threats to the current business model.
As posted by Jerry in a response, there opportunities in the current price decline of WTI. Per a response from Jerry on the company forum (Under Falls Project Update Post #2 Response #2):
“With the current price of WTI, there are some great offers that have surfaced as a result of the lower WTI price. As stated earlier, oil and gas lease valuations are based on production, net cash flow from the production and proven reserves. With lower WTI prices, an oil and gas lease is now valued at 30% to 60% lower than what they were valued at a year ago!! Some oil and gas leases that were economical a year ago are not economical today with WTI price being lower than the production costs.”
Additionally, the Falls Project is still in play, just waiting on stabilization of the WTI price. Per a response from Jerry on the company forum (Under Falls Project Update Post #2 Response #1):
“The Texas Falls project has temporally stalled out. With the price of WTI dropping constantly over the last several months all parties, including the Company, pulled back and is taking a wait and see approach. The Texas Falls project will be revisited once the WTI price stabilizes. Oil and Gas lease valuations are based on production, net cash flow from the production and proven reserves. With WTI coming down, the valuation for the Texas Falls Project has dropped considerably and is not in tune with the asking price by the Sellers of the Texas Falls Project. Banks finance based on valuation and cash flow. If the purchase price is greater than the valuation, the Company has to cover the difference. Currently the Company is not in the position to fund the difference.”
It is apparent, IMO, that they are keeping an eye on the oil and gas industry as a whole, and staying aware of opportunities and threats to the current business model.
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