VIRGINIA HILLS OIL CORP VFGGF

RE:RE:Research Reports

[nlr2]

Ya I remember reading that, thanks for posting it. I just haven't seen any geoscout reports since then. The one graphic in the Q3 report makes it appear as if the waterfloods have halted declines but realistically this doesnt mean much as Evi 1 and 2 are the only floods that have been online for a relatively long period of time. So probably around Q1 or Q2 any report with geoscout info will be very interesting.

Ya the plan as I see it has to be for them to utilize waterfloods to create an asset that is producing 3500 boe/d with a sub 30% decline and with the operating costs under $20 dollars. If they can do this then they have some options. Either sell out to a dividend paying entity that could use the cashflow, merge with another company ala the Spartan transaction and pay a dividend of their own or find another company or asset to acquire and pour the cashflow from the Slave Point into that to become a growth company again.

I have little confidence in the Slave Point ever being a high growth play due to the consistent weather issues, high declines and poor primary well economics. However I do have confidence if it is proven that waterfloods are highly effective that it could be a great cashflow generating asset. Also if the open hole completion of the wells does increase economics as indicated then that would make a big difference in the growth potential.