1800boep, $50m facility by june, well costs dn

The Euroz analyst obviously got to sit down for a private chat with DP at their recent conference as he has just put out an extremely upbeat update.

Apparently we are at 1800boepd all ready so a massive increase from last report. Weare going to be a non-op participants in Devons program this year. Have term sheets from 5 banks, will have $20m now raising to $50m by June 30th. Costs per well dropping. Expecting 3500boepd by year end.

All in all VERY positive. A little frustrating that we are getting it from Euroz first rather than from the company but I will take costs dropping, production spiking and cash raising concerns removed anyway I can! I presume rather than giving a nothing update like the last one DP is holding back so he can put out something that makes headlines - anyway it is what it is.

Whatever these guys are doing to the share price - we are sitting on a lot of oil and DP (other than his announcement timetable) finally looks like he is delivering.

IMO I am investing in a company and it's potential - if I am right with that the share price ultimately will follow despite where some would like to push it in the interim.

Highlights below:

"• Since the start of the CY dev execution has picked up dramatically - 10-12 new wells will be completed by Mar 31 (vs 10 completed to Dec 31). The ops team is turning around on development plan.
• Production has inc from 300boepd this time last year to 1800 today pre-royalty from just the Mississippi and at 80% oil (location is the key).
• East of Nemaha Ridge is key address due to oil nature and recent ramp up in activity endorses this thesis (Devon and Range as the key players vs Chesapeake and SandRidge to the west).
• RFE will be a non-op participant in a portion of DVN’s 400 Mississippi hzntl well programme this CY.
• Reserve growth will underpin RBL in the short-term to complement pace of development - term sheets in from 5 banks; expect facility in place in the next month ($20m initially from 10 wells at Dec 31 growing towards $50m by Jun 30).
• Woodford Shale oil remains untapped potential.
• RFE’s results to date - 7 RFE wells rank in the top 25 30 day IP results east of the Nemaha Ridge.
• The majority of RFE’s inventory of producing wells are “cume-ing” more in the first 90 days than the type curve.
• Spud to spud times have more than halved since Unit rigs arrived - well capex is converging on $3m/well (vs $3.5m we assume in our model).
• Completion optimisation programme has commenced and seeing improved completion to sales cycle times - cashflows are being brought fwd.
• Exit rates guided for end CY ‘13 of 3400boepd pre royalty; 5500boepd end ‘14; +8000boepd end 15.
"