ARHT Media Inc V.ART.H

RE: RE: For the Record

[GreatSwami]

What I am asking is this...

What is the general value of undeveloped oil in the ground and what is the general value for proved and producing reserves?

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The MO never changes - ask the poster a simple direct question - and it is always ignored and replaced with a separate and distracting question.

First I have been away from any direct M&A activity for nearly 10 years. While the question asked seems to be a simple one - it really is a case of Beauty being in the eye of the beholder.

The value of undeveloped oil in the ground depends on a whole variety of geographic, geopolitical, infrastructure and technical factors - as well as percieved oil quality, oil price forecasts, capex and opex consideartions and repeatability factors. The best estimates of OOIP is merely one part of that whole equation. There is no such thing as a "General Value" - it is very much like trying to determine the value of a house in a Canada wide real estate search - the price is only partially about the quality and size of the house - all the rest is location location location. Is it in Kamsack Saskatchewan or Kelowna BC? Is it lakefront, lake view, lake glimpses or facing a prairie slough? Is it the lowest priced house amongst wealthy and immaculately manicured neigbours - or is it the best house surrounded by run down shacks used car lots and a landfill site with hot and cold nightly raves and the incessant growl of Harleys?

The general value of Proved and Producing Reserves? Again a simple enough question - but one frought with slippery consequences. I guess the best way to come up with an answer would be to survey all the latest series of acquisitions and - adjusting for the price of oil and general economic sentiment of the time - arrive at some sort of average number?

But if I were to get an average sale price of a home selling in Calgary in Q1 2010 - does that really tell me about the price I would have to pay for any particular house? The actual price I could pay might be anything from $300,000 + up to $2-$3 million + but the actual Calgary average price might be $400,000+ (Just using random but plausible examples - I do not have the actual Q1 2010 Calgary average house price or top and bottom ranges).

The simple answer is the value of something is what someone else is willing to pay - and that value changes through time and is occasionally out of sync with the value of the underlying assets.

At the moment the market seems to thing Vast's estimated resources - or possible resources - (its enterprise value?) is somewhere between
.67 and
.90 per share. Pick a day - any days trading and it is evident that perceptions of value fluctuate quite dramatically in spite of no change in the underlying assumptions of possible OOIP. Other factors are driving value perceptions. Obviously as drilling progresses and news either confirms that the actual potential OOIP is more probably skewed to either the high side of expectations or the low side the SP will reflect that change in real underlying value as the potential for trapping oil becomes a certainty that at least a certain minimum volume of oil actually is trapped - and there are indications of greater or lesser robustness that the confirmed OIP could be much greater than the minimum confirmed by drilling.

So the percieved value of (to use your numbers) of potentially finding 1.5 Billion Barrels of OIP is replaced by actually proving that 1.5 Billion barrels of oil IS in place - and it could be more... The value of knowing it is there - and it can be exploited - is obviously much greater than the value of the possibility of it being there - which is what the Market has currently assumed.

One doesn't need to have actual numbers to know what the value will be. The Market has priced in the potential today and over the past few months. When the potential is turned into actual - the SP will be repriced to reflect that fact - and the certainty will be valued much higher than the possibility. But of course if the drilling shows that Qara Dagh is - against all expectations - completely devoid of oil or condensates - then the price will fall as the certainty of having very little is much less than the price of the possibility of having much.

All this is of course completely self evident and I really don't need to go into such foolish details. But I just want to let those present here know this is why I always referred to you as the "Great Slithery One" over on the Oilexco forum. Whenever confronting your questions one is reminded of some similarly tricky questions asked the Great One by the Pharisees in popular mythology of a few thousand years antiquity... And perhaps the best response to such questions is simply silence - rather than indulging the michievous intentions of the author?

Of course - before any should think I am pretending any great arrogance or superior understanding - I am just a very ordinary and often quite gullible mere mortal. It is why I value the input on many of these public fora where real information is provided either directly, through third party or via links to information sources that are otherwise hard to find.

Be careful of deceptive questions that are never answered - or which are patently unanswerable. Real and genuine questions are quickly and simply answered and lead to lively debate and ultimately greater understanding. The deceptive questions are merely used as a trap or set up someone for having their legs kicked out from under them. From my experience with The Slithery One over at Oilexco - I was under the impression that the singleminded and clever assaults were done for the sole purpose of a grudge against someone at Oilexco. But his posting here would seem to prove that he is one of the more treacherous hacks being used by someone for the purpose of manipulating perceptions. Be very careful what you listen to - some of these people are very very good at their job - and read any comments made by such folk very very carefully. Do your own due diligence to find some independent confirmation or clarification of whatever issues are raised on these BBs - for ultimately that is the only place you can find enough information to make your best guess. These fora can be interesting places to help indicate what you need to be asking and even someplaces you can go to find answers - but ulimately you are really and truly on your own when you click that buy or sell button - just as you are when you buy that item that you really don't need (and cannot afford) when you are not influenced by the Billion$ that are spent on clever advertising to get you to not buy it by people who have your best interests at heart...

GS