Unconventional Oil

[johnlw]

I see the pros in the Boom Boom room are buying BMD here and yacking it up.
Tackler, do you remember when it first showed up and we scorned the "gravel pit"?
Looks like it is for real and maybe even profitable.

Here is the link to the full rellease:
http://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=B-573305-C:BMD&symbol=BMD&news...

Birch Mountain says Hammerstone worth $1.66-billion

2006-06-26 10:07 ET - News Release

Mr. Douglas Rowe reports

BIRCH MOUNTAIN REPORTS REVISED INDEPENDENT HAMMERSTONE VALUATION

Birch Mountain Resources Ltd. has received an independent valuation report from AMEC Americas Ltd. on its Hammerstone project located in the Athabasca oil sands region of northeastern Alberta. The valuation report was written by Dr. Michael Samis, director of financial services for AMEC Mining & Metals. The report incorporates contributions from other AMEC personnel, the Canadian Energy Research Institute (CERI), Dr. Graham A. Davis of the Colorado School of Mines, Norwest Corp., Phoenix Process Engineering Inc. and Birch Mountain. Birch Mountain has also incorporated information from EnviroSolv Energy LLC in this news release. The valuation was carried out concurrently with a prefeasibility update study that considered new total and reagent products, in addition to those incorporated in the original February, 2005, Hammerstone prefeasibility study. A technical report conforming to Canadian Securities Administrators National Instrument 43-101, describing the results of the prefeasibility update study, will be issued later in the summer of 2006.

Highlights

* the net present value of Hammerstone in constant second-quarter 2006 dollars, calculated with unescalated prices and costs, at a 7.5-per-cent discount rate is $1,655-million on a pretax basis and $1,089-million after taxes. The internal rate of return is 29.4 per cent;
* future opportunities identified, but not included in the valuation, include cement production, spent lime recalcining and reclamation of FGD gypsum and spent lime. When evaluation of these opportunities is completed, the valuation will be revised;
* Hammerstone limestone reserves (after mining losses) decreased marginally to 999 million tonnes, with 460 million tonnes of proven limestone reserves and 539 million tonnes of probable limestone reserves;
* probabilistic modelling of the effects of oil price uncertainty on oil sands bitumen supply to 2070 shows there is little risk that low oil prices will cause bitumen supply to fall significantly below CERI's unconstrained bitumen supply model;
* use of alternative fuels, such as bitumen, residual heavy ends, asphaltenes, coke and coal, instead of natural gas, is expected to create a significant demand for limestone and lime-based reagents for desulphurization;
* a total of $577-million of development capital is required for the Hammerstone quarry, total plant and limestone processing facility from 2006 to 2026, with $416-million in sustaining capital from 2006 to 2060.