IMO it is a smoke and mirrors announcement that seeks to mix existing asset workovers at longhorn with new acre purchase that is currently yielding 12bpd at net 45% interest to 88e.
The workovers appear to be on our existing wells at a cost of 3mill. They suggest these workovers will yield increased production rates to around 160 BOE @ 75% oil so 120bopd, but this is where it gets confusing. They state that our current assets are producing ~400 BOE at 75% oil so that's 300 net of which we get 75% that's 225bopd.
IMOThis is where the smoke and mirrors come in. They do not provide the BOE for the two wells prior to the workover so we are unsure of the lift. They quote at conclusion of drilling the two new wells and after the workovers the BOE will be 500BOE but that's only a 100 BOE increase on current production. and we are not told how that breaks down at wi%
Remembering the two new holes are on 45% not 75%.
I may be wrong but it seems to me we're spending 3 mill on workovers and using income for those workovers to fund 2 new drills at 45% net income.
IMO On face value it looks like the depletion is greater than anticipated on the older workovers and they are spinning news just to top up production to where they need it to be to fund overheads. in the process it's costing 4.1 million
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