Cuervo Resources Inc CRVNF

Missing Liquids Where are They??

[leakeybill]

PEMBINA AREA Jan 5, 2006 Find reported in the Pembina that they had about 15.6 mmcf gas and 1234 bbls liquids Jan 31, 2006 Find reported in the Pembina that they have about 18.8 mmcf of gas and 680 bopd day (liquids) The problem with this report is this on Jan 5,2006 they were producing 3515 boe day from the Pembina on Jan 31 they are now they are producing 3800 boe and the numbers don’t add up. The problem here is that the liquids are not being reported accurately, Find published that they were producing 65 bbls of liquids per mmcf of gas in that area. On their Jan 5 report they were producing 936 bbls day of gas liquids and 220 boe oil. Based on 14.2 mmcf of Pembina production. On the Jan 31 report they report only producing 680 bbls of liquids, of which 220 bbls are oil. This means they are only producing 460bbls of gas liquids. If the same metrics are true from the January 5 report they should be producing about 18.8 mmcf * 65bbls = 1222 boe day of liquids, plus 220 bbls a day of oil. Where are the other 762 bbls day of liquids. Are they collecting them for conversion to Frac Oil, what are they doing with them, is the plant is eating 762 bbls day of liquids. Where could they have disappeared in the 26 days between the time the first numbers were given out for the gas plant. Case 1 ( The missing 762 bbls day of natural gas liquids) They must be storing the liquids for conversion to Frac Oil. (Sand Bagging the Numbers) On Jan 31,2006 they had 11 wells drilled and awaiting completion to be tied in. Is the gas plant operating at 94% capacity??? I can’t imagine that with the infrastructure and plant in place that they did not already have those wells tied in to prevent production fall off. The plant is likely running at full production. Other Areas Production for other areas have increased from report on Jan 5,2006 1585 to 1600 which they are reporting now. More sand bagging, I don’t how many addition well were drilled and tied in at other location in Jan however the net impact appears to be only 15 boe/day. I think based on the information that find has provided up as of Jan 31, 2005 they were producing at least 6162 boe/day and it is likely now that they are producing higher then that considering the wells were drill and waiting tie in and the end of January in Pembina. IMHO