VIRGINIA HILLS OIL CORP VFGGF

RE:RE:RE:Research Reports

[Iching64]

Hi NLR2,

a good summary -  it all depends on the success of the waterfloods as the "primary well economics", as you say, are not that good.

So far the waterfloods hav done quite well -  compared to what I read about  waterfloods in general.

Waterfloods can take up to a year to get an initial response, PRY's took several weeks.

The watercut can go as high as 95%, but PRY's seem to have stabilized around the 40 to 60 % range.

The initial production increases seem to be in the range of  70 to 100 % (if I recall). Maybe more.

Now we need time to show how the decline curve is less steep, thus creating long-life wells.

And we need more wells put on waterfloods to get some meaningful statistical averages.

So if the waterfloods work as planned, PRY could be a "great cashflow  generating asset",   especially since the net back per barrel  is so high.