The Investment Case
The competitive advantages offered by the Hot Creek Valley prospect are:
- The potentially low extraction costs of the conventional resource at approximately $5 / bbl to the refinery, as compared to $25-50 / bbl for unconventional wells in a shale play.
- That additional drilling could potentially raise Contingent Resources to Reserves and by so doing increase the asset value significantly.
- That the substantial area of the play at 88sq km offers wide scope for large-scale development.
- That the stable legal and political environment offered by United States compares favourably with other regions of the world.
- US Oil & Gas has, compared to oil explorers with similar achievements, a low number of shares in issue.
- US Oil’s lease area is close to the highly productive oil field at Railroad Valley (35 miles) and is believed to be geologically comparable in exploration terms.
- The unit cost of extracting oil in Nevada is amongst the lowest anywhere. The Hot Creek Valley lease area is close to a highway and two refineries. As a result, the viability of the field is minimally sensitive to the oil price.