RE:RE:RE:water$4 is only about 20% of NPV. Far too low in my opinion, even for the portion of resource used for PFS - let alone the property.
Look at LAC and piedmont - pushing 60-70% of NPV.
Interesting points on thermal lease rules... didn't know about onions.
desertbarnacle wrote: Cartman,
Good post. I would suggest trucking water is not really feaseable but until we know what amounts of water per hour would be needed, I guess it cannot be discarded, unlikely but ok, maybe.
The taking of the geothermal lease was a stroke of genius, no question kudos to manangement. However, it remains to be seen what sort production this lease could do, it might be enough or might not be much, we just do not know the answer to that, no one does at the moment, as no well has been drilled into the lease.
Then there is the law governing such geothermal waters as to uses, another unknown. I would point out that we use geothermal waters as a heat source in Nevada to dehydrate onions, so who knows, maybe there are few issues, other than what production could be achieved by a well or wells. We need comments from CYP on this point.
Then there is ALB and I agree it is match made in heaven, only caviot is that they stand at the pearly gates and they will be leading that discussion. I have always said that ALB makes a dollar and we make a dime, that would get us to somewhere around four bucks with any luck.
As to pumping our own brines, two things, yes, we have brines at depth, for on western portion of the Glory block where we own a good chunk of what PE and now SLB are working at. And, there is little doubt that addtional brines exist widely at depth on the over land package, maybe even high grade brine.
However there is a rub there, we cannot produce those brines as things sit right now in Clayton. Why, simple, ALB already owns 130% of the annual yeild of the basin waters and no new water rights are being issued. This is the deal and a point that needs federal and state intervention if ALB will not come to the table and offer a fair price for our resource, say $4 a share, maybe a bit more, all guess work. To allow ALB to continue to evaporate away this critical brine resource is not in the best intrests of anyone, even ALB.
There is the water right of NEV, one that they had to fight with ALB to retain, that would be another avenue but would likely be expensive, still it is good thing that the option exists. Maybe there are other options, time will tell.
Bob