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OK in layman's terms....

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photonwav   Tuesday, 01/14/03 12:34:19 AM
Re: None
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OK in layman's terms....

Why are we in a hurry to do it right?
It's the commodity....and the coming war premium.
When you view our tables on the projections on a successful new well...
Remember we used the price of $26 per barrel. todays prices and the near term are above this...

In simple talk.....

a 5% Working Interest costs $3,000 US.
IF we drill a dry hole we refund $1,500.
THEN you write OFF your taxes 100% of the remaining $1,500 US....!

IF we hit a producer....
The cost is the $3,000.
BUT in the first year you write off up to 85% of that investment and then over the next 5-7 years you write off the remaining percentage against ordinary income....sound good huh?
THEN 15% of every dollar earned is TAX FREE!*

PLUS if you view our charts....

We have wells that produce from 20 barrels a day to 80 barrels a day......50 to 60 is a good average....

Lets take 55 barrels a day.....

The POTENTIAL math on a producing well.....
Initial investment (eventually totally written off taxes)
$3000 US
Now a 55 barrel a day producer makes over $8,000 US a year (paid monthly royalty checks) and that is using $26 as price per barrel..

THEN we have wells that last 20-30 years and STILL ticking!
so the potential of a $3000 working interest could transpire into
$8000 a year times 20 or so years...and 15% tax free.....hmm and maybe a BUSH more generous 15% depletion allowance????

And 15 CENTS on EVERY dollar is TAX FREE*.....
*CONFIRM with YOUR tax EXPERT......

BUT now it is EASY to SEE why we SAY:

Diamond A Energy
Bringing you The Niche of the Rich

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