getting out of a hole 101, page-19

Dis, I dont think you're an idiot, I think you know your stuff and respect what you post, and I suspect where we differ may be biased by our relative positions.

Imo area 2 would go for significantly more than the $100k/fbo - thats only valuing the production. The 22 wells prove the area and therefore the valuation would be related to the remaining development potential that the 22 wells in that area have de-risked. By my reckoning area 2 with 39 x 640 acre sections has as much as (not all of the acreage will be drillable) 117 gross well locations at 3 wells per section (i.e. not including downspacing to 5 wells per section, which would provide for up to 195 gross well locations, and not including and WS development), so the valuation is about the surrounding land in that area that the 22 wells (and related infrastructure) have now de-risked. Therefore the valuation is the de-risked value of the other well locations in that development area, not the valuation of the 22 wells already produced (and remember, many of these have already produced at their peak rates).

Btw, if AOK's vertical drilling strategy is more economical than RFE's horizontal strategy, then:

1. Why is AOK considering horizontal development in addition to its vertical well strategy?

2. What's to stop RFE from drilling verticals rather than horizontals just like AOK?

Cheers, Sharks.