Hemi Energy Group Inc. (fka HMGP)

[davidmarkblack]

Seems if it could be determined what the large amount of proved/probable reserves that are just in the Woodson County leases were valued at, a closer understanding of Hemi FMV could be ascertained. I have an older chart that shows when Oil was at $20 bbl the Hotelling value of the proven reserves was about $8 bbl. Obviously this would not include the valuation of the gas/oil leases in Montgomery County and the FOUR other States that Hemi has oil and gas leases. Any experts here?


Reserve booking
Oil and gas reserves are the main asset of an oil company. Booking is the process by which they are added to the Balance sheet. This is done according to a set of rules developed by the Society of Petroleum Engineers (SPE). The Reserves of any company listed on the New York Stock Exchange have to be stated to the U.S. Securities and Exchange Commission. In many cases these reported reserves are audited by external geologists, although this is not a legal requirement. The U.S. Securities and Exchange Commission rejects the probability concept and prohibits companies from mentioning probable and possible reserves in their filings. Thus, official estimates of proven reserves will always be understated compared to what oil companies think actually exists. For practical purposes companies will use proven plus probable estimate (2P), and for long term planning they will be looking primarily at possible reserves.
http://www.answers.com/topic/oil-reserves


Hemi Energy Group Announces Oil & Gas Reserve Study for Woodson County, Kansas Leases
The proven oil reserve as submitted by Geosystems Engineering, Inc., Dallas, Texas to Hemi Energy Group, Inc. (Pink Sheets:HMGP) is 2.15 million proved BOE and the probable reserve of 5.1 million BOE for Hemi’s five leases in Woodson County, Kansas. The total potential reserves are 7.2 million Barrels Of (oil) Equivalent for this report.

Hemi Acquires Its Most Valuable Block of Leases to Date in Kansas
Hemi has acquired additional leases that will add approximately 2200 acres contiguous or adjacent to our 5 leases with mature wells & proven reserves in Woodson County. This will give Hemi a total acreage equal to almost 11 square miles which has blanket geological formations in this part of Woodson County. This new lease acreage is part of an ongoing larger lease program in Eastern Woodson County, Kansas that we expect will become a total of more than 17 square miles by the end of this quarter. When these 5 mature leases, with proven reserves, were originally drilled there was a gas solution drive in the pay zone that produced oil wells that had production of nearly a hundred barrels or greater per day per well. Management believes that these newly acquired virgin leases will produce similar or better production than the mature leases results based on historical notes, i.e. driller's notes, well logs, core samples, etc.