transforming nse, page-33

HI Modric,

Carrizo was definitely a presentation I looked at.

On comparisons though, the Type Curve for CRZO is for a gross 495MBoE of production (and as noted "North LaSalle County acreage’s combination of high EUR, relatively low well costs and premium pricing result in superior economics")

Hard to compare the 346MBoe Peeler Ranch curve to that - and that's why the IRR is so radically different.

You can see for CRZO that first 2 years produces about 145MBoE of EUR 495MBoE (approx 30%) and for my NSE curve 115MBoe of EUR 343MBoE (approx 34%).

Also CRZO has a JV - with drill carry - so the question is whether that was factored in or not (I would hope in an overall well economics slide they do NOT include the benefits of their JV). Also while CRZO is lower oil as a % of production they do sell their NGLS and gas as noted whereas Peeler is flared


As far as F&D costs go, all CRZO is reporting is that for net production (i.e. after royalty) what is the cost of Capex spent per BOE produced (there are many more costs not yet deducted).

So Gross Production is 495MBoe
NRI is 75 % so 370 MBoe
at Capex of $8M

So F&D = $8M/370,000boe = $21.62


For NSE Peeler Ranch, we have been (publicly) given:

Well Capex = $6.5M and EUR 325MBoe (the success case)

F&D therefore = $20 per Boe (simple).


What will vary much more is the LOE for NSE and where true "shale scale" comes into play.


On the F&D issue, many would say you also have to add in the Capital spent acquiring acreage and seismic. So it can get more complicated (and will when its put on the books because they also have to carry abandonment costs for example).


Anyway hopefully that helps with why numbers can be very different (like with EP Energy - also no minnow - and their various positions around the EFS).