Eric David & Sons: Can you introduce our readers to your management team?

Brian Fox: Our engineering and geology are contracted out to independents. We do have one in-house engineer that we use for fieldwork, completions and that sort of thing. At the moment, I am the only director of the company. I took over the company on the 1 st of January 2004. The directors that were there resigned when we took over. So basically, I am the upper management. I have a business manager in Calgary as well as a field manager in Oklahoma and project managers on all the properties that we are working on. As for my experience, I have been in the oil and gas industry since about 1976-77. I worked in all areas from field preparation, development, to lease and land work to financing and marketing: all areas of the industry. Other than that, as I said, we contract everything out to the professional engineering and geology people.

EDS: Can you briefly discuss the projects that Powder River Basin is currently working on?

BF: Right now we have two projects in Louisiana that we are working on. One is in the Spring Hill area of Louisiana. That is a 21 well re-work program. We just took that over in November. So far, we have 4 wells on that one and we are working on that one continuously. It will probably take about four months to get them all back on. It depends on how the weather cooperates with us. We have one in Arcadia, Louisiana. That one is about a 960 acre project. It has 9 wells on it and two of those are operating. We had one scheduled to re-work in the last week or ten days, but they got rained out so it will probably be another month before that one is operating. We are trying to get all of those on this year, but it depends on the cash flow. We have another project in Osage County, Oklahoma that is also 9 wells. We have three of those operating and two more ready to turn on. We are just waiting for a disposal well permit to handle the extra salt water and then those will be on. We have a large project in Wyoming. There are two projects that are coal-bed methane and we have a total of about 10,000 acres in there of methane gas. Then we also have about 6,800 acres of deep gas that we have just leased. On one of the methane lease we have started drilling twelve wells, but they are not yet completed. We are getting ready to test them now. We expect to have at least one of those tested and completed within the next 60- 90 days. We are still waiting on permits from the state and for the water permit. Other than that, we have a couple of other projects that we have offers in on. One of those we have a signed agreement on, but have not taken over yet. We are scheduled to take possession on the 15 th of March and that is approximately 1,000 acres and 33 wells.

EDS: There has been a substantial turn around for this company since its incorporation. Can you talk about the company’s history and your vision for the company?

BF: When we took over on the 1 st of January 2004, the company had not produced any revenue at all in the previous years. They had purchased some Methane properties in Wyoming, some of which we still have. They had spent a fairly large amount of money developing and doing some infrastructure on a couple of the properties, but never had anything on production. So the first cash flow that the company had was when I took over and bought the Arcadia property in Louisiana. That was the first cash flow. In the first quarter, I think we had about $35,000 in cash flow, which was the first revenue the company had ever seen. At the end of the year, the total revenue was just over $2 million. We are in the process of doing the audit now and that will be available in the next 30- 45 days. The revenue went from zero to just over $2 million the first year, which I think is pretty good.

EDS: Is Powder River Basin involved or affiliated with any major oil companies? Would you like to be or are there any plans to be in the future?

BF: We sell our production to larger companies such as, Shell, Conaco, Eighty Eight Oil and Texas Gas among others. We sell production to the major companies, but we have no working interest with the majors at this time. At this point, we are going to stay the course with what we have. That is always subject to a good offer coming along and whenever an opportunity comes along. We are looking at properties all the time, but, at this time, we are going to stay the course as an independent.

EDS: Are you currently seeking funding, if so, how much and what type?

BF: We are always looking for development funds. Right now, we are in the process of trying to set up a $10 million credit facility. We are doing a presentation on it this week coming up and, if that goes through, we will be setting that up as an acquisitions fund and development fund. We can use that so we do not have to take any breaks waiting for the next month’s cash flow. That is just in the birth stage right now so we will see how it comes along.

EDS: What was the revenue like for 2004? Is this an improvement from 2003? What can you contribute this to?

BF: The revenue for 2004 will be filed in at approximately $2.4 million. That is compared to 2003, which was zero. The net profit from that will be approximately $1.2 million. The main reason for the increase is that we have concentrated our energy on building a business rather than banking land, as the company had done in the past. I have not had contact with the parties we acquired the company from so I do not know what their plan for the company was. The reason that we have turned around the cash flow is because we have started to work toward beginning production immediately. Also, we have a marketing program where we market a small percentage of the working interest on each one of our properties to a financial planning group to raise development funding.

EDS: What are the earnings projections for 2005?

BF: Right now, we are looking at approximately $5 million. I think we may do better than that, but we are going conservative. One problem that we have had through January and now February is the bad weather across North America. We have not been able to move equipment around properly and we are working between rain and snowstorms. We have been set back a little bit. Since December, we have not been able to get anything down because of the weather. We are still looking to be over $5 million for this year. It should have been higher than that, but we are behind schedule.

EDS: How many shares are outstanding and how many are in the public trade-able float?

BF: The total issued is approximately 100 million. In the float, we think there is between 16 and 18 million shares.

EDS: What percentage of stock do company insiders hold?

BF: In the last report, it may have changed a little since then, but when we last filed it was about 68%.

EDS: Where will Powder River Basin Gas Corp go in the next three to five years? What do you see as the ultimate goal for the company?

BF: That is a difficult question to answer because we have gone further last year than we expected to. The goal for this year was to get the production of oil and gas up to 1,000 barrels per day and I think that is very achievable. Over the next three to five years, we are looking at some deeper gas developments, but until we get the engineering done on those it will be hard to make a guess. Certainly, we will continue to move forward. I think the total, once the engineering is all in, the total should be in excess of $100 million, which is fairly substantial. That engineering information should be available sometime in April. Once we have all that information in, we can give a more accurate target of what we can do over the next three to five years.

EDS: Is there anything else you would like to add or to say about the company?

BF: Well, I feel the stock is trading at quite a bit less than what it should be. It is that way because the company had been dormant for some time. When they first started buying the properties, the stock did go as high as $1.87. Right now, with the cash flow the company has and the net profit last year of just over $1 million, I believe that it is a very good buy for anyone that is following it.

Interview conducted by Kristin Huffner, an independent consultant of Eric David & Sons. 3 February 2005.

Please view thier website at http://www.powderrivergascorp.com/

Please view the disclaimer for PRVB here

2004 © Eric, David & Sons, Inc. All Rights Reserved.

--------------------------------------------------
To unsubscribe to the EDS Newsletter, click here.