One Google publication has the cost of the Lost Cabin gas plants as US$1.50/MMSCF which at 310 MMSCFD equates to US$465 million (Elk’s 14% share equates to US$65 million).
The following plot shows the processing history of the Lost Cabin plants in relation to the Madison wells.
It should be remembered that Denbury made a significant investment in the CO2 facilities (dehydration and compression) and the construction of a pipeline link to be able to transport the Lost Cabin CO2 to Montana. Denbury would not have entered into a CO2 supply contract with ConocoPhillips nor invested a considerable amount of money to process and transport the CO2 if the Madison source and the Lost Cabin plant had a limited life.
Repeat Performance Part 5 post follows
Newblood
ELK Price at posting:
7.6¢ Sentiment: Buy Disclosure: Held