A Challenge

Now that we are almost certainly no more than days/ week or so from the much "anticipated " IP24 number I just wanted to get ahead of what seems to happen when a company announces such an event.

Investors commonly see a headline number ( say 1500 BOEPD ) and try to predict revenue for the year by multiplying that number by WTI and project that out that for the year.

So we will get statements like " Jewell will generate 1500 x US$70 x 365 = US$ 38.325 million"... "so at a 46% BRK WI that means BRK will generate US$17.63 million per year" .

So I would like to throw out a challenge..

Can someone please calculate :

1) The value of a BOE where the price of oil is US$70WTI, the gas price is US$4 per MCF , NGL's sell at 50% WTI oil and if the well produces 30 %oil, 40% NGL and 30% gas.

2) The revenue the well will produce over the first 12 months if the production averages 1500 BOE for the first 3 months, 1100 for the second, 900 for the third and and 700 for the 4th assuming no change in commodity prices or production mix.

Hopefully a few take up the challenge and it will be interesting to see what the numbers will be.

For the person with the first and closest answer I will buy a beer or 2/ premium glass of champagne/ wine at the AGM drinks next year, conditional on " the guy from the West" opening his border to the rest of us by May 2022.

Depending if anyone responses, I will post the working out later tonight.

Cheers

Dan

PS... I use the traditional gas/oil ratio of 6:1 in the calculation