Cmon & All,
I am following discussion with interest but not quite on top of the detail atm, Overall I like the acquisition and think there has been some good work done. There are many loose ends with my research atm and this is by no means any indication that I have any answers. For the financials I will wait for the next quarterly as I haven't been updating my spreadsheets.
As best as I have done so far this is my summary from the NDGov Production reports and well info of the Oasis Foreman Butte wells, my guess is these are the wells but i don't know the NRI or if these are the wells.
The reported production from these wells are summarised below, this is Gross Production not NRI so analysis is incomplete, as we can see the bulk of the production is from the Bakken Wells. The ones highlighted are my guess to the first wells to have a birthday, reason being the Pads are the ones producing so possibly offer the lowest cost. Maybe this is wrong though if a workover needs production downtime in which case it would be some of the others as the production would be important to contibute to the bottom line.
Also the value subtracted from the sale was lower than my original guess and I think this could mean the loe costs were higher than my $16/bbl and also the OP was lower if that makes sense.
Using the coordinates from the NDGov site this is a google picture of one of the pads. (ie.150.102.10)
On the Legacy Production (Meaning the Stockyard creek, Rainbow) this is my calc of the NRI by well. Unless there were/are major disruptions for weather or operational issues my guess is Feb/Mar could be similarto Jan as the wells now apear to be in the flatter part of decline cycle but this could be wrong for example there may be some downtime.
On the hedging I think it may indicate it is likely OP could stay at these levels longer than we would like therefore the downside protected. Upside may come from increased volume from the development program and this means the wells will need to be low cost producers. Looking at the infrastructure on the Pads I would think the replacement cost of the hard assets (Wells, Tanks, Production facilities etc.) would be more than the price paid so any lift in production from the workovers could give a boost to valuations but early days to say and imo we really need some improvement in O&G sentiment.
Hope this is of some use but as always just my workings and opinion.
Cheers & GLTA
SSN Price at posting:
0.6¢ Sentiment: Hold Disclosure: Held
