VIRGINIA HILLS OIL CORP VFGGF

RE: RE: RE: Exit Production closer to 7,400 b/d es

[splurge]

You are right about that. I did adjust my model down at one point for that but not in this recent run. Before I took off 200 b/d per qtr assuming they were 50 b/d wells going down. When I get home I will check it but neverthe less the input I use based on some of the information they have provided does not add up but maybe I am doing something wrong. Still if you look at their cash flow for the year and assume they could take on another 50 Mln in debt then cash available for cap ex is around $160 Mln. You don't need a model for that. They cash flowed 20 Mln q3 I recall or estimated for q4. Differentials have narrowed and oil is up and they spent lots in q4 which shows up q1 and so production will be 1000b/d higher in q1 vs q3 and q4. So cash flow in q1 should be 26 to 28 Mln? Annualized 112 Mln plus 50 debt gives them plenty to spend. Have you ever met a junior exploration company that did not spend cash it had? Appreciate your opinion.

Thanks