Replies to post #43849 on Hemi Energy Group Inc. (fka HMGP)

[bdahl385]

The 20% reduction in the crude price gross to net is because of the royalty payment to the mineral rights owner. Hemi has PR'd previously that the Woodson Co. leases are 80% net leases (80% for Hemi, 20% for the royalty).

The Coffeyville, KS crude prices has an entry for Eastern KS crude which derates it slightly compared to the other KS crude oil grades because of the relatively lower API of its oil.

http://www.coffeyvillecrude.com/CVRCrude/showPriceBulletins.do

[REAZO]

Badge - There doesn't need to be "profit" right now. Every O&G company is feeling this crunch. Hemi will be able to weather the storm better than most because of their lack of debt and keeping expenses low. "Profit" can be had once oil starts to return to normal levels and get out of this 'reverse bubble'.

We are quite lucky about them being debt free. Although it always seemed to be a plus, I don't think I realized how important it would actually prove to be. If they had been more aggressive and taken on unnattractive debt, I really don't know how things would look now. (with debt, the pps might have even fallen below .01 :)

Anyway, being debt free is a critical success factor now.

Also, I'm very glad that they unloaded WY leases when the did to fund the horizontal drill(s). So, even during this period of possible minimal profits, expansion and further development and growth can continue.