Subject: File No. s7-29-07
From: Kiralynne Schilitubi
Affiliation: Professor of English

December 24, 2007

File No. s7-29-07

Concept Release on Possible Revisions to the Disclosure Requirements Relating to Oil and Gas Reserves

I do not support relaxing standards for proven nor unproven petroleum related reserves.

Current rules on this topic are directly based upon reasonable certainty standards which is appropriate and the most logical approach. Despite great advances in technology related to this industry, reasonable certainty is no better than a century back.

My viewpoint is guidelines for reasonable certainly should be more strict.

I will cite a case example of Dover Petroleum traded under the DVPC ticker. Over the years, this company taunted a reasonable certainty of reserves over in Egypt. Much drilling took place and, in the end, no production. Reason for this failure is those reasonable certainty reserves could not be drilled and tapped. This specific reserve is overlain with a very hard rock intrusion. Dover encountered problems with drill bits breaking off, and problems with not being able to remove those broken bits. Drilling had to be abandoned. Ample shareholder money was lost through Dover abandonment of drilling efforts.

This Dover incident well exemplifies a reasonable certainty of reserves is not a guarantee of actual production. Quite the opposite, a majority of reserves which are drilled and tapped prove to be not economically viable, there are more abandoned wells out there than producing wells.

My viewpoint is guidelines for reasonable certainty should be more strict.

Another case in point. Some companies buy and sell reserves, proven and unproven, then taunt the public with claims of drilling operations will begin soon on claimed vast reserves. Truth is later discovered, a company did not have any intent to move into production, no drilling took place. These are companies which make wild claims about proven and unproven reserves based on data which is very old, data developed by companies decades back before modern technology. A recent example of this is the North West Oil Group, former NDOL ticker, today NWOL ticker. Shareholders lost millions of dollars on this Russian Company once word came out the company is a scam operation which buys and sells worthless reserves like baseball trading cards. Many claims were made by this company about reserves, which later proved to be worthless reserves.

Reasonable certainty did not protect the public from this scam Russian company, the North West Oil Group.

I contend only proven reserves should be reported as assets. Unproven reserves should be allowed in news releases but not allowed to be claimed as assets other than the actual value of the land, not the unproven reserves.

My point of view is a reasonable certainty of reserves should be based strictly upon successful drilling, tapping and surface flow testing. Unproven reserves are just that, unproven. Claiming a reasonable certainty for unproven reserves is a perfect oxymoron.

There is another company which is claiming great reserves, Hemi Energy Group trading under the HMGP ticker on the pink sheets. This company is claiming future success based on holding old oil survey records dating back the turn of the last century, dating back to 1910, 1920, 1950 and other similar years. This company claims no other company holds those records, only Hemi holds those records, some of which are a century old.

Is the SEC to relax reasonable certainty standards for Hemi which is relying on surveys performed a century back? Certainly no modern technology involved with this company.

Modern technology has not improved reasonable certainty. Modern technology has improved locating possible petroleum reserves, but better locating of reserves does not improve nor lend to better reasonable certainty. Only drilling, tapping and surface flow testing lends to reasonable certainty. Any activities less than this, is only guessing.

My estimation is relaxing standards for reasonable certainty will only enable and enhance scam operations by less than ethical companies. Relaxing these standards will open up new loopholes for companies to use to defraud the investing public.

All of us know the stock markets are riddled with corruption and with fraud, so much so most of us seasoned traders consider the stock markets to be a massive con game.

Relaxing standards for reasonable certainty will only serve to increase fraudulent activities.

Best regards,

Kiralynne Schilitubi
Professor of English
Choctaw Nation