VIRGINIA HILLS OIL CORP VFGGF

RE:RE:RE:RE:Hedges

[ofirme]

I tried to put the first 12 months of flow into a spreadsheet by the graph and it tells me 80 if you 
 assume first two month not flowing... I think their graph is too high as far as their flow.
I will say the following: the reason why I like this company in comparison to others, is that they 
 kept it simple. not too much debt and they came in knowing that primary production is only the
 first inning. the profit comes from waterflooding.
If you take 75 wells with a NPV10 of $5M each (First 4 years alone is closer to $6M, but lets be
 conservative) and you deduct $128M of debt, you get $375M - $128M = ~$240M which is ~CD1
 per share ($0.95 US). that is with no future value for the other 320 potential locations.
If you look at multiple future waterfloodings, the value is much higher. 
We are looking here at an extreme valuation to the downside. they have the capital and they are
 behind the really tough points. 
It is a pitty that management had to overpromise in order to secure the equity, but that is the 
 reason they are at such a good position right now compared to others.