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04/09/22
12:10
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Originally posted by jophda:
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The problem with the pipeline and more drilling is that the Alberta assets will not generate enough fcf to pay for much of that and the dilution of further credit raises would be devastating.Management needs to build trust that they do what they say they will first .
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Agree, a lot will depend on where the Blackspur assets production sits next Year and the WTI. The next drill program is important and focus will be on the bigger Thorsby wells as it should be.
Originally posted by rosencrantz:
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Stack plots are mainly used to see various trends in variables over a specific period of time. so this suggestion the company needs to produce a stacked plot of all wells historically, say the last 2 years... is an excellent suggestion. The decline rate must vary across the individual formations and will be influenced by the incidence of waterflood in particular and the place in its projected producing life of the individual well. My suspicion is that the high yielding low cost vertical, conventional wells in Brooks exhibit a very high decline rate..say 60% by IP90. If that is the case then this part of Alberta is more costly, in terms of decline, than the traditional shale producers in the Permian and Bakken. Then again Gemini-3 shows that there can be some very high yielding , yes 500% IRR type wells in Brooks . Is gemini-3 a once off? and never to be seen again? The CEO is rather too dismissive about well production projections at Brooks when he asserts- as he did in Sydney - ' well some will be above the average and some will be below' After 8 years in the job he could access a mountain of historical data about production from Blackspur wells and from wells in adjacent areas which are tapping the same Sunburst/ Glauconitic formations. So how does he justify in the current announcement an IRR of 270% on the conventional wells at Brooks ?. It's time for the Calima directors to show the science that underlies their production projections.
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On the plus side, a well that under produces is still producing, ie no dusters. The cheap wells do drill and plug in quickly for a fast result. Maybe with the new land acquisitions they can look to start finding and draining some new pools. Agree, a matrix of some sort to indicate decline rates would be welcome for transparency.