ssn net production numbers, page-17

Hi doctor, not quite right. The boepd measure allows us to compare total oil and gas production figures between wells and companies, but its an energy equivalency measure.

The conversion comes from the equivalent amount of energy contained in the respective volume of each material (oil and gas):

1 cf of gas contains 1000 btu therefore 1mcfg = 1 mmbtu

1 bbl of oil contains 5.8 mmbtu

Therefore 1 bbl of oil = 5.8 mmbtu = 5.8 mcfg

Pricewise we get:

1 bbl of oil (WTI price less $10 bakken discount) = $95

1 mmbtu of gas (henry hub price) = $2.02 currently, therefore 1 boe of gas = 5.8 mcfg = 5.8 mmbtu = 5.8 x $2.02 = $11.72.

So the earnings from 1 barrel of oil is significantly better than from 1 boe of gas. From zoom-bee's post we would expect:

437 bbls of oil x $95 =$45,510 per day

951 mcfg/d = 951 mmbtu/d x 5.8 x 2.02 = $11,141 per day

Conversely, 600 - 437 = 163 bbls of oil x $95 = $15,485.

So the boe equivalent amount of gas brings in about $4k/day less than the same amount of oil.

Still, accoridng to the above, the company would be earning about $61k/day (thats revenue) x 300 production days/yr is about $18m revenue at the current production rate. Definitely improving...:-)

Cheers, Sharks.