GREY:VFGGF - Post by User
Post by
SaskAlbertaon Jan 14, 2014 12:28pm
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Post# 22089467
Pretty well sums things up.
Pretty well sums things up. "What a catastrophy of a company. So far they have spent over $500 million to achieve 3,000 BOE/day of fast decline production. And the waterflood is helping them pump more water, surprise, surprise. If they do not get bought out for the land, in my opinion, the bank will put them out of their misery. Fracing is great technology, but that does not mean every company can do it on any old piece of land and make money. I think many companies are not being honest about the cost of fracing and the decline rates and the true rates of return after financing and management costs. Sure they tell use that each well location is worth $3m based on a $2.5 cost of drilling and $5.5 million worth of oil recovery. But no mention is made of all the associated costs such as financing and management costs while we wait for all that oil to come out of the ground. If at the end of the day there is no money left to pay dividends to the shareholders, then in my view, the company useless, the land is likely not worth being bought out and worse the whole thing could be a fraud or sham simply designed to provide jobs for questionable management types."