Quick analysis
1238 BOEPD at 85% liquids implies 1052 BOEPD liquids and 186 BOEPD gas which equals a gas flow of 1.1 mmcfgpd.
They have produced 14800 barrels oil and 29 million cubic feet up to now.
The 1052 BOEPD liquids will not all be oil, there will be a NGL component in that . But the 14800 IS all oil, so there is an unknown volume of NGL's to be allocated in sales at some stage.
The NGL's are in the gas stream and are not separated by the BRK facilities which only separate the water, oil , gas and some sand. The " wet" gas is sent down the pipe line to the 3d party gas plant.
So depending on how " wet" the gas is will determine how much of that current 1052 BOEPD is NGL's, and this is were we have a small " dilemma".... we want as much oil as possible, so the " wetter" the gas is the more of the 1052 liquids flow will be NGL and the less will be oil..... but, we want the gas to be as wet as possible, as that will mean the greater the gas flow, the greater the NGL's , the greater the liquid production.
BRK initially had the base case at 1300 BOEPD with 800 BOE oil ( IMO oil and liquids) and 500 BOEPD gas ( 3 mmcfgpd) so the fact that the well is producing liquids over the base case scenario in absolutely brilliant.
How wet the gas has not been disclosed atm... anything at 1) 50 barrels per MMCFG is good, at 2) 100 Barrels per MMCFG is amazing and above 3) 150 is incredible.
So if the NGL/gas is at
1) then at ~1.1 mmcfgpd, the well is also producing 55 barrels NGl's per day which means the oil flow could be 1000 BOPD.
2) then the well is producing 110 barrels NGl's per day which means the oil flow is 940 BOPD
3) then the well is producing 165 barrels NGl's per day which means the oil flow is 885 BOPD
So it may seem that we want the gas to be less wet because it affects the liquids oil/ NGL ratio but that is incorrect. The oil flow will be what is is, and the wetter the gas, the higher total liquids production.
Typically the NGL / gas ratio does not change too much over the lifetime of the well...it is like a water tank with a coloured fluid, where the fluid represents the gas, and the colour represents the NGL .... when you first open up a tap at the bottom of the tank the solution pours out rapidly. As the flow slows as the tank empties the solution doesn't change colour, just less of it comes out.
The same thing typically happens in with wet gas, ( there is some change with pressure changes down hole), as gas flow decreases , NGL production decreases proportionally.
That is why we want the gas to be very wet. The Jewell is modelled for the oil to decline much steeply than then gas , so a wetter gas will have 2 positive effects.
1) The total liquids decline will be lower because the NGL decline will match the gas decline
2) The NGL reserve will be larger because at 150 barrelds NGL per MMCFG, the NGL reserve will be ~3 time larger than at 50 barrels NGL , so NGL production cashflow will be 3 times greater, and there will be a significant increase in the value of the NGL reserves which will have a very positive impact on the acreage valuation.
So as the well gas produced 29 million CFG, at 50 barrels per MMCFG, there would also be ~1450 barrels NGL produced, up to 4350 barrels NGL.... over and above the 14800 barrels oil.
I would love to know what the BM modelling for the wet gas is in terms of barrels NGL/ mmcfg and hopefully BRK start to report the oil, NGL and gas flows , rather than liquids and gas. I suspect that will happen down the line .
This well result is absolutely incredible... is getting better and looks like materially exceeding expectations on oil/ NGl but possibly under on the dry gas component . In todays market, if there was going to be a miss, and you had a choice, you would choose more oil, more NGL and less gas any day of the week.
What a great day to be a Brookie!
Cheers
Dan
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