Ann: MEL announces scrip merger with Elk Petroleum, page-34

From what  can gather, there will be limited expenditure needed prior to the field going into production. Essentially we are providing capital for running costs. See link below for slightly more detail. I don't see this as being a cash drain due to Denbury essentially free carrying/financing ELK. The major downside that I see to this deal is the dilution of any proceeds from settlement/damages. In effect we would only be getting 77% of these potential monies + ELK. The question is: Is ELK worth 23% of any settlement? At the moment I'd have to say yes, as revenues at 35% of 4-12k bopd are impressive - along the lines of 30 to 120 million a year on $60 oil. Even if profit is a quarter of that you suddenly have a lot of flexibility in how to proceed with NSW gas development.

http://elkpet.com/projects/grieve-field/

The operator of the Grieve CO2 EOR project has expended over US$70 million gross on the project to date. Of this total, Elk was carried for US$10 million (Elk 35% net share) and has a credit facility for up to US$12 million in project expenditures (Elk 35% net share), plus the interest that will accrue on this loan. The operator has incurred additional expenditures beyond these joint venture costs for the CO2 pipeline to the field, the electrical infrastructure for the field and the CO2 recycling plant for the project, which is expected to cost $50 million and is currently under construction. Elk will pay for these additional costs through a 15-year lease agreement during the production phase of the project.