Value Microcaps Junior Energy

[kipp440]

TXCO - 10Q - Pages 19-21 tell the story, here is a link to the full document for anyone interested.

http://www.sec.gov/Archives/edgar/data/313395/000031339507000096/txco10q.pdf

My question to the board is what are these 3 paragraphs worth?

"San Miguel Oil Sands - The two-well cyclic steam pilot test of the Oil Sands formation with our partner, Pearl
Exploration and Production Ltd., involves a steam injection, soak and production cyclical process designed to
heat the oil (0 degree API gravity) and allow it to be produced. Both of the pilot wells are in the third steam
injection cycle. Production rates as high as 48 bopd were achieved for short periods during the second production
cycle. We hope to see higher production rates in the third production cycle for both wells that is expected to
begin later in August. Oil produced from the project was sent to prospective refiners to establish a pricing
differential. We have received a preliminary estimate that our heavy oil will receive about a $15 per barrel
discount to West Texas Intermediate prices, comparable to prices for similar quality crudes produced elsewhere.
Additional steam generation equipment is on order for the expansion of this pilot. We expect to drill three
additional wells on this pilot later this year.
Drilling on a second pilot with 16 wells is scheduled to start later this year updip of the existing pilot. We expect
the second pilot will accelerate the overall project and establishment of reserves. We have ordered steam
generation equipment for this pilot that will probably arrive late this year or early next year. We are considering
using fracture-assisted steamflood technology recovery ("FAST") methods with a few modifications to compare
its results with the cyclical process used on the first pilot. TXCO has a 50% WI and serves as operator. We
believe that our net interest in these oil sands amounts to roughly two to three billion barrels of total oil in place.
Our CAPEX budget calls for 21 Oil Sands wells in 2007.

Heavy Oil - Separately, we have begun a shallow pilot in an area (100% WI) that our geologists and engineers
estimate contains 100 million barrels of heavy (10- to 14-degree API gravity) oil at 100-300 feet in depth. Two
parallel horizontal wells with 2,000 feet laterals have been drilled through the zone, as well as five adjacent
vertical wells. Our engineers have ordered steam generation equipment to begin heating the formation in the new
pilot. We hope to begin injecting steam in the fourth quarter this year. Costs incurred to date on this project are
about $0.5 million.

Pearsall - The horizontal well (50%WI) drilled with our partner, EnCana Oil & Gas (USA) Inc., in the Maverick
Basin's Pearsall formation is currently in completion. A second lateral was drilled after the drill pipe, motor and
bit became stuck in the first lateral and could not be retrieved. This lateral will be fracture stimulated in four
intervals. We hope to have it tested and on production by the end of the third quarter. This is the second well in
an ongoing program by the partners targeting this gas resource play. Our CAPEX budget calls for up to three
Pearsall wells to be drilled in 2007 with EnCana as operator."