February 23, 2007

Power River Basin Gas Corp.

(OTCBB:  PRVB)

 

EricDavid & Sons Text Interview

Brian Fox, CEO

Power River Basin Gas Corp.

 

 

EDS:  Brian, thanks for taking the time to speak to the EricDavid Internet Audience today, about the exciting activities occurring at Powder River. 

 

For this Q&A Interview, I thought it would be useful to have you speak directly to topics of interest and questions voiced by PRVB Shareholders, through various Internet Discussion Sites.  Here, I have gathered a representative sample of voiced concerns or questions, on the minds of shareholders. We can get right to the questioning.

 

Question: 1 – One Blogger indicated that he has been doing Due Diligence, via a review of public records from the Texas Railroad Commission (RRC).  He indicated that PRVB was at one time a P-5 operator with an active filing at the Texas RRC.  He indicated that the RRC has PRVB listed as inactive, with a delinquent P-5 organization report that is past due since 1/19/06.

 

He also indicated that one of the PRVB wells, the J.P. Green has the Operator of Record Listed as Ricardo Oil and Gas.

 

Brian Fox :  Let me assure everyone that PRVB is in Good Standing with the Texas RRC.  Until recently, Powder River had a minimum operator’s license in Texas, to operate up to 9 wells.  The Company has increased its Bond to $50,000, and is now authorized to operate up to 99 wells in Texas.

 

Further, many of the PRVB wells were formerly active wells with previous firms. In addition, PRVB uses “Contract Pumpers” at many of its well sites. For these 2 reasons, well documentation with the Texas RRC, many currently carry inaccurate or outdated data.

 

I am not familiar with the firm Ricardo Oil & Gas, another name mentioned; Transcontinental Minerals is a contract operator for PRVB.

 

EDS: Question 2 - Bloggers often ask for a more professional looking Company website. They say first impressions are important to potential investors. The criticism they outline often follows two tracks. They talk about more visually appealing site design and graphics, but they also talk about more refreshed and updated Project statistics and data.

 

They say the current site format and design is an impediment to attracting larger and sophisticated investor groups, who are accustomed to viewing flashier websites.

 

Brian Fox:  Let me say that the Website is currently Under Reconstruction, as we speak.  PRVB has an in-house assigned responsibility for the Website.

 

People should keep in mind, not all Oil & Gas firms even have websites. Further, many Companies our size also do not have websites.  This is an area, website design, the look, and the feel, that the Company will never be able to satisfy all comments, for all sources.   However, Powder River is working on enhancements to the site continually.

 

Regarding large investors, large investors know where to get the most up to date information on a Company.  They do not extract numbers from a website, as their only source of information. They communicate directly with the Company, through the Company Investors Relations Department, who can provide the most currently available information.

 

EDS: Question 3 – One Investor asks about his view that PRVB desperately needs an Independent Board of Directors.  Some say the lack of a Board, serves as a potential negative to larger investors. They go on to say that big potential investors will not invest in a “one man show”.

 

A companion issue relates to the naming of an Executive Management Team, with an appointed #2 and a #3 executive for the Company.

 

A third related issue is a perceived lack of overall Depth of Management at Powder River.

 

Brian Fox: Over the years, I have worked in environments with Boards and Board Members, all trying to pull a Company in different directions.  I have considered a Board environment for Powder River and am still studying the idea, but I am not ready to move on a Board concept, at this time.   For Powder River, to have an efficient Company operation, Board Members would need to be team oriented individuals, with whom I would be comfortable working with, for the common purpose of advancing Powder River.

 

Let me say, I am not a One- man Operation at all at Powder River. I actually have Consultants who I utilize as trusted strategic advisors, much like a Board environment.  These individuals, may over time, transition to Board Member status, and/ or in-house Executive status, as the #2 or #3 execs in the Company.

 

The discussion surrounding Powder River Management Depth is a huge misconception, which I am happy to address head – on today. Powder River is not an organization with 2 or 3 people, but actually has a full 30 person staff, and is solidly staffed with qualified individuals from top to bottom.  We are, however, currently undertaking an HR review, to perhaps better align job responsibilities and job titles etc.

 

  

We actually have a Full Management Team in place from Field Engineers to Office Management. In the field, we have 2 and I plan to add a 3^rd Project Manager.  They are known as Project Engineers or Field Engineers, and are responsible for Site Operations. Currently, one is responsible for TX site Operations and the other is responsible for OK and LA site operations.   Shortly, we plan to provide Profile Packages, on their qualifications and backgrounds.

 

As many know, PRVB uses Pumper Service Contractors, for actual Operations, at each well site, rather than PRVB employees.  The PRVB Project Engineers are On-Site Project Managers.

 

EDS: Question 4 – Who are the engineering firms that do the reports on PRVB’s reserves?

 

Brian Fox:  Powder River utilizes a variety of engineering firms to provide Reserve estimates. The Company does not currently have any one firm under Contract.  In some cases due to circumstances, PRVB has utilized up to four different firms, at various times, on the same project. The Company is considering hiring an in-house engineer to work on due diligence related to future projects and acquisitions.  This person could be a resource to assist outside engineering firms.   However, all reserve estimates will be calculated and completed by Independent outside engineering firms.

 

EDS: Question 5 – Is Powder River going to be announcing its 2007 Drilling program shortly?

 

Brian Fox:  As you know, Powder River has a multi year ongoing Drilling Program in place that we are executing.  Typically, we announced the Drilling Program, for the year,  around the same time as we announce the Year –end results.  We anticipate an approximate mid-March information release for the Year End results, Production Numbers, and details of the 2007 Drilling Program.

 

As our Investors Know, Powder River has multi Projects available. We are almost finished drilling at Goliad, as we are working on well # 13 in the 14 well Project Series. 

 

Weather has delayed us at some of our work sites.  At Brookshire, we drilled one well in December, but rain events have slow our progress there. In Ok, we faced the massive ice storm there and were without electricity there for sometime.  As we contract services, availability of crews and equipment at specific work sites, causes work delays from time to time, as well.

 

We do anticipate that our focus in 2007 will be both Brookshire and the San Juan Basin.

 

EDS: Question 6 – What efforts are being made to move PRVB to a major exchange like the AMEX?

 

Brian Fox:  Powder River is seriously researching the possibility, as we speak. I have an individual specifically assigned to this issue.  The Company, as well other experts,

feels that PRVB is a good candidate to gain selection via an exemption, via complex formulas available to certain rules.  There is a precedent for such exemptions.  Due to the large cash flow and asset base of PRVB, experts feel that Powder River meets various benchmarks for inclusion.

 

Regarding AMEX, no formal application has been made yet.

 

PRVB should know in the next couple of weeks, if such a move will be likely.

 

EDS: Question 7 – One question comes up a lot relates to the style, and amount of specific detail in the published Press Releases.  We are talking about subjects like the average sale price per bbl, or the price paid for a new lease acquisition, or percent of working interest in a particular property.

 

Brian Fox:  - Our Press Releases are designed to be informative, and by design not used as “puffery”.

 

Each of those topic concerns is a separate situation or condition.

 

One number is readily available and widely published, that being the price PRVB is paid for the natural gas that it produces. PRVB is paid the monthly 30 day average price for its produced product.

 

Regarding the price PRVB paid or was paid for specific properties won’t be made public. This information won’t be published in a PR as it could be harmful to PRVB, in its dealing related for future purchases or sales of properties.

 

Percent of working interest is an number we routinely publish.  We will be announced working interest percentages, by project, shortly in mid- March, with the publication of the year-end results.

 

EDS: Question 8 – Some investors have wondered if a Company Stock Buy-Back Offer, might be useful for the Company, given the 120,000,000 shares currently outstanding.

 

Brian Fox: - Actually, Powder River is investigating the possibility, at this time.  If we get approval, we may go forward and announce a Buy Back Offer, in a few weeks.

 

 

 

 

EDS : Question 9 – When will the year- end results be released? And there is always the Question about production numbers.

 

Brian Fox:  - The internal financials for the Year-End are completed.  The audit is being done now. The process is on schedule. Typically we release the Year – End financial results, to include production numbers and working interest percentages, in March

 

Regarding Production numbers, one thing to remember is that the monthly average changes on a daily basis.  Changes in production are often caused by mundane everyday events of the ground. The scheduled arrival or delay of tanker trucks is an example of a small event, out of the control of Powder River, which can impact the monthly production numbers.

 

Powder River is happy to provide investors with production number information by simply emailing Steve in the Investor Relations Department.

 

 

EDS: Question 10 – The recent news releases that Powder River was seeking to enter the Canadian Oil Sands area raised some questions with Investors, specific to Deep Well, Oilpods, and the role of Powder River in the Oil Sands Projects.

 

Brian Fox:  The initial project with Deep Well was not a good business fit for Powder River.  It would have taken more money, than we wanted to allocate for that Project.

 

Oilpods is only involved in US Projects with PRVB, at this time. However, the door is open for them, to participate on any projects that we bring forward in the Oil Sands sector, should they so desire.

 

If we enter the Oil Sands, and we are looking at other opportunities, it would only be as a non –operator. We are just looking for “working interest partnerships” in the Canadian Oil Sands sector.

 

EDS: Question 11 – Bloggers have noted that in the last 60 days, Powder River has had a string of Good News reported in its PR’s, but all this Good news has not reflected itself in an increased share price.

 

Brian Fox:  As the largest shareholder in Powder River, I share their frustration with the recent level share price.  The Company is making a substantial amount of money, but it doesn’t seem to be reflected in the share price.

 

 

However, I think one needs to step back and take a longer view of PRVB, rather than just a 1 week or 1 month snapshot.

 

Actually, PRVB has had a steady upward climb in share price, since I joined the Company on 12/17/03.

 

At that time, 12/17/03, the share price was $0.013

12/17/04 it was $0.08

12/17/05 it was $0.24

12/17/06 it was $0.36

 

The long term trend has been steadily upward.  Many early investors who purchased blocks of shares at $0.05 and $0.08, have taken their profits and sold shares, I would guess.  It is the nature of the beast and beyond our control.

 

EDS: Question 12 – The question always comes up for discussion about PRVB being a Revenue Producing Company; via Land Sales versus Oil and Gas Production

 

Brian Fox:  As many know, actually the Selling of “Working Interests” usually at a level of 25% is a designed strategy on the part of Powder River to fund its Drilling Operations without the use of Long Term Debt. The Company has no Long Term Debt, as a result.

In addition, the funds raised provide PRVB with positive cash flow.

 

Revenue in 2007 will continue to grow from Oil & Gas Production Quarter to Quarter.  In this business, there is actually a lag time of 4 months, before you begin to see the full cash flow from new producing wells that are brought on stream. As many know on Goliad Project for example, Powder River has recently brought several wells into Production.

 

It is hard to say however if in 2007, that the Oil and Gas Program will surpass the Marketing Program.

 

Several external factors impact Production, such as the weather. In our Ok Project, we lost 12 days due to the recent Ice Storm.

 

I know some felt that PRVB was holding back Production at times, due to depressed pricing levels for natural gas.  That is just not the case however.

 

2007 is going to be a very active Production year for PRVB. Based on the availability of crews and equipment for various sites, we should begin at the McFadden Project in 5/07 followed shortly in 6/07 with the San Juan basin Project.

  

EDS: Well Brian, thanks for the Updated Report on Powder River.  I know the Shareholders will appreciate hearing your responses, to questions that have definitely been on their minds.

 

This Powder River Basin Gas Corp. CEO Interview was conducted by Greg Moses, a Consulting Editor to EricDavid & Sons, Inc.

 

For more information on EricDavid & Sons, Inc., please visit www.ericdavid.com.