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To: tom pope who wrote (166352)	3/27/2012 6:20:13 AM
From: Bearcatbob	1 Recommendation of 178657

Good morning Tom, When I read Jim Bob's letter a couple of weeks ago I took away the message that DJ is a process and not an event. Unfortunately I played it as an event and not a process. In this case I did not want to settle for the "bunt single" approach of CCs and SPs. In my working days we would occasionally have projects that simply were one problem after another. We called these jobs "science projects" that kept sucking money. Ending the bleeding usually took a strong action with full management backing. Sometimes the sales guys simply sold stuff that did not exist in the real world. $2 gas and $200M wells strike me as a clear example of a "science project". If we go back to December when DJ was supposed to test the share price was north of $15 and there was huge premium in the up strike and out month call options. Since then the cost of the well has soared and the price of nat gas has crashed - a bad combination. If the well cost north of $200 million and gas at the well head is $2 then the only financial hope I see is if there are a large amount of liquids in the production flow. 50 mmcfd at $2 would be $100k per day and ~$3M per month. Does anyone here have an idea of what the operating costs are to define a cash margin? EXXI on the other hand has a large large oil component to sales and a large inventory of oil prospects. EXXI can profit if the UD ever works. Take away the near term uncertainty of DJ and I hope EXXI can trade on its own oiliness. To me the end game for MMR is to prove up the resource and have it bought out by a major to put the resource in inventory. A successful test of DJ2 later this year (with emphasis on LATER) would IMO help prove the concept. I would appreciate the thoughts of "oil guys" on the board. Has MMR found a gazillion cubic feet of a semi worthless commodity? Bob

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From: riskyinvesting	3/27/2012 7:52:10 AM
	2 Recommendations of 178657

BC - MMR is a work in progress. If the ultra deep works, it will produce about the lowest cost gas in the country. At prices in the range of $4-6, which is necessary for the dry shales to work, the ultra deep will generate huge profits. I posted news of the first perforation gun failure a few days back. Nothing really changes, other than they will go back at some later date and try again. I was hoping for some flow data. Maybe Jim Bob will mention something this afternoon. I also think the ultra deep play extends on shore. It is my understanding that MMR is leasing up land on shore. While DJ1 was very expensive, I think they can get well costs down to below $100 million. There has been a lot of expense tied up with engineering the equipment, which is a one time cost. If the play works on shore, the wells will be very cheap. The end game I think is for MMR to prove out the play and then be sold. I think any deal is a year off. It the play comes anywhere close to 100 TCF, a LNG terminal out at mainpass is probably in the future. NA gas needs to enter the world market for the price to stabilize. Risky

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