Cuervo Resources Inc CRVNF

Find Update

[leakeybill]

Find (FE) update The company is currently producing about 5600 boe, Their gas plant is still not operating at capacity and the well tie ins are on going making production not 100% stable. They have about 10-12 mcf of gas behind the pipe and plan to drill 15 well in the Pembina in the first quarter. They are almost complete a 3D seismic program over their 17 sections of nisku rights and are hoping to get a well licensed to drill in the fall. There are two major oil discoveries in the area of their lands one 3 miles away and another 2 miles away. Their other core area is producing about 1600 boe and they are planning another 3 wells there as well. Not included in finds boe number is the premium they will receive for frac oil which will not show up in their as production but rather as revenue and that should equate to another 500 boe a day. Finds current market cap is around 350 million dollars and according to analysts they should cash flow somewhere around 2.50 shares in 2006. Once the plant gets stabilized they could peak their production at 6500 boe not including the 500 boe frac oil premium. Find is located in Royalty Trust Alley and will have almost 5000 boe of production from the Pembina with a 3 year drilling inventory. The management considers the stock significantly undervalued and by the way what would a trust pay for 5000 boe of production, a gas plant, 500 boe/day of frac oil and a three year drilling inventory in the Pembina. Q4 will not reflect the new gas plant coming on stream. Let’s wait and see.