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US Energy Corp. Message Board

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  • margin321 margin321 Apr 11, 2012 7:20 PM Flag

    ED : at CC, Keith said current prod.

    The Montana Bakken acres may or may not be economic.

    The south block of the Eagleford acres don't seem to be that promising.

    The north block of the eagleford acres MAY be a little better, but that is based on half a lateral.

    The Brigham acres and the Zavana acres are highly economic, but they sold most of their remaining interest.

    The Cirque wildcat in Kern County was a duster.

    The acres in SE Colorado did not pan out (one operated duster).

    They are still thinking maybe they can operate something like the Montana acres themselves and even develop it. They shouldn't think like that.

    They can operate an apartment complex and get some monthly cash flow. They can't sell an apartment complex.

    It is not yet certain if they can bring the Mt. Emmons project to permitting stage, while it is certain it will take a lot of money to try to do that.

    It is not certain if they can sell Mt Emmons or find a JV aprtner to develop it.

    It is certain they do not have the resources to front huge up front costs for years to get a Moly mine to the production stage.

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    • They have stated several times they are looking for a joint-venture partner on the Montana acreage.

      They have had offers on Mt. Emmons that they have turned down in hopes of finding a better deal after they file a plan of operations. You may consider Mt. Emmons to be worthless. But it would be a direliction of fiduciary responsibility not to try to maximize the value of a World Class asset.

      • 2 Replies to quantitativeeasing2
      • If they have any offers on Mt. Emmons they should let the stake holders weigh in on them!

      • <<They have stated several times they are looking for a joint-venture partner on the Montana acreage.>>

        Looking for something is not a highly rewarding effort, unless it leads to finding something. They just did a big presentation in NYC at IPAA and I don't think they had anything fruit from that effort to share with us.

        As for Mt. Emmons, there are a lot of medium term investments in energy and moning that have a long lead time and cost money to move forward. The question is whether USEG can afford to use all of the profits of the company to keep this one project moving forward. If it really is a bonanza with real potential for massive profits, why wouldn't someone else pony up the operating costs to the point of operations and then 75% of the capex through to production for 50% of the profits. More importantly, why would TC that had a better deal in place with lots of money already invested, just walk away from it.
        I expect that they walked away because they had other places to put their money with better return. And they had to chose among the options to invest their available resources.

        So is Mt. Emmons the best place for all of USEG's money. What if they were another little oil and gas company trying to grow oil production - would you advise them to buy a non-operated mine years from production and put all their cash into trying make that happen. Maybe they should spin the moly mine off into a separate busienss and try to advance it on its own merit. If that is ridiculous on the face of it, then why would a small oil company make it their big project as an add on unrelated to their core business. Other than they used to be a mining comapny and are run by people with a lot of mining expebackground.

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