Ann: Lightning Well Delivers Significant Gulf Coast Discovery, page-324

We did. Our NRI share of production (so take out cash operating costs and we get operating cash flow which is before any SG&A expenses)



The above was modeled on IP24 of 15,000 Mmcfpd, which for the first year produced 3.9Bcf and 86MBbls of condensate. That is a big well for this area from what I can tell (BF-2ST produced 2.7Bcf and 31MBbls of condensate) - in line with "significantly exceeds". I'd call it "outstanding" for the area.

I hope everyone appreciates that there are many, many more variables involved  ... not the least of which is what constitutes significantly ... that can alter the above forecast (up & down as is most often the case with O&G guys being "half-full" by nature and finance guys "half empty").

But if you noticed, all I showed was the first year (and its always the first 2-3 years that are most important). I did extend the model out for 5 years. I'm not so sure folks will be as "pleased(?)" with the numerical result that it spits out. However, what I'm hopeful of is that the decline rate is shallower than the Baer Franklin average, which lifts results higher. That is something we won't know with any confidence for some time (maybe after 6 mths prod).

So Ron, that's a long answer with a simple message - to remain cautious. Year 2,3,4,5 are not anything like Year 1. But I'm happy to stick with around 18mths for payback as the target. As you pointed out in an earlier post, we paid 50% for this one to get 28.5%. The other wells go back to paying our WI of  37.5%.