latest patterson research, page-6

Well the Patterson report certainly corroborates my conclusion that there is nothing out there which Elk is going to do in the next 18 months that comes close to the impact of these hedges. They have almost zero windfall from current oil prices and have the double whammy of having the exit premium from the high oil prices with no compensating cash flows except from more external sources either debt, equity or equity partnerships. This is a brutal story with some scary outcome potentials given the leveraging. if any of these wells starts to sputter the equity is toast.