EricDavid & Sons Text Interview
Brian Fox, CEO
Power River Basin Gas Corp.

 

EDS : Brian thanks for taking the time to speak with me today about the exciting activities occurring at Powder River . I know Steve has previously had the opportunity to interview you, a couple of times for the EricDavid & Sons web site audience. I am now enjoying my turn at the questioning, as I have been watching the Company with interest.

With the daily average trading volume increasing sharply of late, do you agree that the Company, based on great results, appears to be really starting to get noticed by a diverse and broad variety of Investors and potential Investors?

Brian Fox : I believe the numerous interviews, seminars and talk radio programs have helped to increase our visibility. We have also initiated a mail-out newsletter to existing shareholders as well as potential investors. The response to the newsletter has been extremely positive.

EDS : Events have been really spectacular the last few months for the Company, from the performance of the Goliad Wells, to the financial results, and now, a very interesting and compelling, Updated Proven Reserves Report. Of these three very positive accomplishments, it might be difficult but, which one is the most dramatic from your perspective?

Brian Fox : It would be difficult to pick a single item as being the most significant. Each of the mentioned channels feeds off each other. It has been our intention to take care and develop all facets of Powder River to profitability and higher visibility.

EDS : Brian, I have a follow on question regarding the recently announced September 25 th Updated Proven Reserves Report that may be on the minds of some in our audience, as well. Were there certain recent conditions, on the ground from Operations that contributed to the dramatic rise, from values presented in the last Engineering Report announced September 6 th, related to Proven Reserves?

Brian Fox : Our previous reports and studies indicated that the probable and possible reserves were very substantial. As soon as a well is completed successfully, the probable production becomes proved developed producing “PDP”. This is the biggest factor in the increase.

EDS : The September 25 th Reserves Report also naturally reflected a much lower average Oil and Natural Gas price calculation, as compared to the September 6 th Report. As Oil and Natural Gas prices have been volatile lately, are you optimistic about the outlook for Natural Gas prices, for the immediate period ahead?

Brian Fox : Very optimistic. During September and October, consumption is lower as the cold weather increase has not yet started. As well, the drain from air conditioning is less as temperatures are more or less consistent across North America . While we predicted lower prices in the fall, I would expect a gradual increase around November.

EDS : I know you have mentioned previously that the Goliad Project is on schedule. Now with 8 wells completed, is it still the plan to complete the remaining 6 wells in the 14 well series, as one final phase or group? Is a targeted completion date nearing for those 6 remaining wells?

Brian Fox : We plan to start drilling the remaining 6 wells in late October and expect to have them completed by the year end. When we started the project our target was year end and we are still on schedule subject to weather and other unforeseen problems.

EDS : This might be a delicate question, but I’ll ask it anyway. A lot of Investors and potential Investors, seem to be constantly asking CEO’s, in general, if they are Selling any Shares. With the recent stock price appreciation run up, have you personally sold any shares?

Brian Fox : Good question. I have not sold a single share of PRVB. It should be remembered that I made a sizeable investment in Powder River when I took control in December 2003 as the Company had no cash or assets and in fact was carrying a substantial loss and no revenue. The “start up funds” were provided as well as funds require to liquidate a number of debts. I feel the shares are considerably under market value and I have no interest in selling at this price.

EDS : I want to raise another “water cooler conversation” companion question that is also somewhat delicate but often is raised by Investors and potential Investors. It centers on the general topic of Company dilution. I know you have mentioned previously, that Warrants were issued by the Company early on, like many other firms, to get the business up and running quickly. What is the current situation related to any possible widespread Company dilution, at this point in the Company’s business lifecycle?

Brian Fox : One of the reasons for operating a start-up public company is to have the flexibility of being in a position to offer an investor an upside when the company is successful. When we started the marketing program to raise development funds, the first investors were offered warrants at slightly over market price. I believe all the warrants have been exercised as “144 stock”. Other than some incidental stock payments on purchases there are no other warrants outstanding at this time, to the best of my knowledge.

EDS : Everyone is really excited about the future potential in the San Juan Basin of northwest New Mexico . The textbooks call this region the second largest gas field in the contiguous United States . I was curious, if the Company had a revised anticipated activity start date for the San Juan Basin Project?

Brian Fox : We are still planning to start a re-work program prior to year end however we are not under any firm time commitments on the project. With a light frost on the ground it is easier to move equipment off the central roads.

EDS : With San Juan , Powder River has acquired a lot of acreage there. Do you anticipate, if the Company has initial strong success there, that the opportunities might be such that exploration by PRVB may span multi- year Project duration?

Brian Fox : Absolutely, It is our plan to have continuous 5 year marketing and drilling program and to have the projects in inventory to continue our program.

EDS : We talk about Goliad and San Juan , but are there other existing Producing Projects in the current Powder River Portfolio of properties, that have further untapped potential for additional exploration?

Brian Fox : Yes. We have a tremendous up-side on properties in Lincoln County , Oklahoma as well as Springhill , Louisiana , Acadia Parish, Louisiana and Monroe , Louisiana . All these have several new drilling locations which can be developed and are currently being engineered to that end for 2007. We are also re-working projects in Mississippi , Texas , Louisiana and Oklahoma which will be further analyzed after re-works are completed.

EDS : A lot of Oil & Gas firms, it seems, do a lot of partnering and co-development with other firms. Is the concept of partnering and sharing projects with other firms, an opportunity for PRVB?

Brian Fox : Very definitely. Depending on the risk factor as well as the location of a certain prospect we would entertain a joint venture either as an operator or as a non-operating working interest partner providing the economics made sense.

EDS : Is there anything else, in closing that you would like to add for the EricDavid web audience?

Brian Fox : I would ask that you check the news release of today, October 12 and yesterday, October 11. This will once again change the reserve PV 10% substantially.

The purchase of the East McFadden Ranch project, along with the first well being drilled on Brookshire, places Powder River in the 5+ year continuous marketing and development program which we previously discussed.

And Greg, I want to thank you for taking the time to spend with me today and also to thank EricDavid and Sons Inc for their continued support and assistance in helping to move the company forward.

I want to thank all the shareholders and investors for their continued support.

EDS : Brian, we really appreciate the Powder River Basin Gas update today, and wish you and the Company continued success.

This Powder River Basin Gas Corp. 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.