Pelle Karlsson and EvelynT. Karlsson - Page 10

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           not materially different or more valuable than acreage assigned                            
           to Technology-1980.  Like the tar sands acreage assigned to                                
           Technology-1980, none of the tar sands acreage assigned to                                 
           Cromwell had any reserves or value as of 1979.                                             
                  General explanatory material relating to the oil crisis of                          
           the late 1970's and early 1980's and a detailed explanation of                             
           the EOR technology involved in these cases are set forth in                                
           Krause and will not be repeated herein.  See Krause v.                                     
           Commissioner, supra at 134-136, 157-165.                                                   
                  Before investing in Cromwell, neither petitioners nor anyone                        
           hired or otherwise engaged on petitioners' behalf visited or                               
           inspected any of the Cromwell gas well sites in Louisiana or                               
           Cromwell's tar sands properties.                                                           
                  As in Krause, petitioners' experts rely on irrelevant                               
           generalities and theoretical exercises, ignoring crucial facts or                          
           making erroneous assumptions.  Some of the claimed differences                             
           are based on pointless mathematical exercises.  For example,                               
           petitioners' expert, Charles G. Bursell, calculates that, per                              
           investor dollar, Cromwell received from its tar sands leases in                            
           excess of three times the oil-in-place that Technology-1980                                
           received.  Bursell's attempt to make Cromwell appear the better                            
           investment simply fails to address the real problems in the                                
           transaction between Cromwell and TexOil, including the fact that                           
           the leased tar sands acreage had no value.                                                 





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