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the EOR technology were excessive, unreasonable, and valueless.
The fixed fees agreed to by Cromwell for license of the EOR
technology were not competitive in the industry and were contrary
to industry norms. Further, a prudent investor would not agree
to pay substantial fixed fees for undeveloped, untested
technology that could be licensed directly from the inventors for
no fixed fees but for merely running royalties based on actual
incremental production attributable to the technology.
Of petitioners' experts, only John Cayias attempts to
address the potential profitability of Cromwell and thereby to
justify Cromwell’s license fees. Cayias’ speculative economic
projections, however, are not credible. Cayias' projections
assume commercial development and a successful pilot of the
technology. Cayias' projections do not account for the risk that
a pilot would be unsuccessful nor the multimillion dollar cost of
a pilot of the technology. Cromwell had only $153,000 for use on
its tar sands properties, an amount totally deficient to fund the
resource definition, coring, pilot, and other steps required just
to get to the starting point of Cayias' projections. Cayias'
failure to account for real costs and risks is inexcusable.
Cayias errs in his assumption that Cromwell alone, and no
other partnership, would receive proceeds from development of the
Burnt Hollow acreage, one of the tar sands properties. The
proceeds from development of any Burnt Hollow acreage would have
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