future growth potential, page-4

Denbury farmed into 65% of Grieve in exchange for:

1. Sole funding project costs upto $28.5M
2. Fund and building the 3 mile CO2 pipeline, $1.2M
3. Fund and build surface facilities, $50M
4. Provide funding support for further field expenditure, Denbury's share is (65% of $34.3M) $22.3M

The total that Denbury agreed to outlay is $102M to gain access to 7.8MBO (65% of 12MBO). That works out to $13 per barrel. Denbury is probably expecting the oil to be worth around $25-$30 per barrel once fully developed.

ELK's 4.2MBO is worth $55M just on Denbury's capital expenditure, and possibly as high as $120M, and that's not assuming recoverable oil being more than 12MBO for the field.

ELK's pipeline would be valued at around $20M-$30M once oil starts to flow.

The upside to ELK's sp is considerable in about 12 months time. I wonder if Denbury would consider buying the remaining 35% plus the pipeline at say $70M-$80M. That short of cash could buy ELK a lot of small fields and get them developed.