@2020MustangI am aware of this table from NI, however more recently Bas Vermeulen posted the following (I made a copy on my PC, but don't know when it was published):
BasVermeulen:2.5MMSCF/day isthe breakeven point.
We don't know the flow rate of the Lorelle zone at this stage
We also don't know how much the other zones will flow after will have completedtheir fracking program.
Whilst I understand what you are saying - that 2.5mmscf/day is pocketmoney - we don't know what rate we will eventually flow from this well, andtherefore we don't know how much money we will make from this well. Themarket currently only knows that the Lorelle flows higher than 2.5MMSCFD and istherefore deemed commercial stand alone.
So, I honestly don't think you can already draw anyconclusions about the technical and financial performance of this well?
BasVermeulen:Also, thank you for highlighting that 2.5mmcfpd is a very low number. They only need to make $10M / year in order to break even. Really adds to the potential, doesn’t it?
Gharp:It's fine if that is the breakeven rate for a 1.5billion dollar project with 100 wells but this is not going to get anywhere near that sort of funding in the first few years even BPT couldn't afford it so the FID would need to be based on a few wells thatwould be able to achieve it a profit to potentially drill more wells in thefuture. I'd say they need around a 5 to 10 Mcfpd for the project to be viableas nobody is going to pump money into this to break even.
BasVermeulen:That’s how gas fielddevelopment project are costed though. Work out the cost and return for onewell, then apply some efficiency and productivity margins to be sure, and thenyou can extrapolate that to 100,200 or 300 wells it all comes down to cost& revenue per well.
It’s not like 1 or 3 wells are not commercial and 100 wellsare commercial.
Scalable is called scalable for a reason.
In my opinion, it would have been better to opt for a horizontal rather than a vertical well. In addition, DD-2 net pay thickness mainly consists of tight unconventional, therefore, in my opinion, a successful frac job in the deep high pressure sands will be required to achieve close to 2.5 mmscf/d.
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