VIRGINIA HILLS OIL CORP VFGGF

2014/15 is looking very good

[benbola]

The 2013 boepd numbers are disappointing, but the big news in today's announcement is the future production context:

1. The decline rates on the new wells are falling dramatically, significantly extending the lifespan of each well.

2. The cost of the new wells has been cut by ~25%, and there are efforts to reduce the costs even further.

Translation: the medium and long-term picture is EXCELLENT. If the lifespan of a well doubles, then there will be more sites operating concurrently, even if the rate of drilling new sites remains constant (which it won't). Reduced cost-per-site, with perhaps double the volume of oil produced. With a pretty sizeable reserve base which could grow in the future.

Needless to say, the more oil produced, the greater the cash flow. The greater the cash flow, the more new sites can be drilled. And so on, upwards.

Lots of debt? Yeah, when you don't factor in the business model going forward. The risk here is not the debt -- it's the ability to execute to the model. If they execute, the debt is nowhere near as big of an issue as some are making it out to be.

JMHO.

[Iching64]

HI Benbola, I basically agree with your post, because it agrees with what the Canaccord report said a few weeks ago -  the title was "Building for the Long Term". It is a report that Blue Eagle should read, since it is based on GeoScout data, not Magical Thinking. PRY is temporarily stalled in it's growth, not at all unusual fora speculative junior. However they are building

[nlr2]

I would agree with your take. I wish they would have revised the exit target downwards, remove the artificial target at the end of the year and help the decline situation further. If debt is the concern then them taking it easy in Q2 and Q3 should be reassuring, not a cause for concern. We all saw Arcan wreck themselves by refusing to take it easy until they were in too deep. The capital

[terroir]

1) Where do you get that decline rates on new wells is declining? You are mis-reading the statement regarding corporate declines. 2) Yes they have reduced the cost of new wells, but also the IP30 rates are down. However, adding back waterflood, its better to drill more inventory and take a longer production curve. It looks like it will be a long slow haul for PRY. But being CF positive in 2014