Hi DanPech, As usual a very excellent insight from yourself ....

Hi DanPech,

As usual a very excellent insight from yourself . One of the reason's i post is because people like yourself shed more insight into the oil business and cost calculations helping myself and others to understand better and refine them. So really appreciate what you wrote..big thanks.

i understand BOE is a unit of energy, and not all BOE are equivalent in terms of value.

Ratio BOE of Oil to Gas for Caroline Well
David Deloub was asked the break down between Gas and oil on the 8/8/2023, his answer indicated the Ratio of Oil to Gas is 4 to1 so 80% of production is expected to be Liquid oil and 20% is expected to be Gas for the recently drilled Caroline well. Evidence of this is CC below

Transcript for Investment HUB: 8/8/2023

Question1)

Whatis the approximate percentage of revenue does the oil component generateand similar for the Natural Gas as well, and is this ratio’ likely tostay constant over time or will the oil component versus Natural gas increaseover time.

.

Q1. We estimate that the liquids (oil) componentrepresents 80% of revenue and gas 20%. We are not expecting this to materiallychange over the life of the well.

David did mention that the nearby well TAQA 16-07-034 well EUR(Economical Ultimate recovery) was around 10BCF of Gas(10 billion cubic feet of gas) and has produced 1.75 BCF of gas in the initial 16 months,. If Caroline GAS Production rate is similar to TAQA and we know that the liquid oil component is expected to be 4 times as much as the Gas BOE's then the profit can be calculated given the conversion factors Danpech gave or available the internet.

But this all rest on the Caroline well being as or more productive than the nearby TAQA well.

Royalties
Reading the Alberta government website, the Alberta royalties percentage are dependent on two factors:
1) Is the the well is at the pre-payout or post-payout production stage
2) The current price of oil, their is a sliding scale for royalties percentage dependent on of the price of oil at the time.
Previously post a link to these were posted on HC.

Currently the Caroline well is in the pre-payout stage and hence the royalties are relatively small. Once it gets to post payout then the royalties become larger. so Initially the royalties wont be a huge distorting factor, but i do agree with you it would be nice if David Deloub did explicitly separate out the royalties cost so can calculate more accurately for various spot price of oil.

The royalties rates are visible on the Alberta website, also once the well goes into production the royalties actually paid for should be published on the Alberta government website along with other wells royalties payments..

Certus Oil and Gas Inc
On the 22nd July 2021 Certus Oil and Gas did an announcement where they had acquired 5000 BOE/d production capability that would add 28 million $CAD to their annualized cash flow. Stone horse energy intends to pay dividends when they can sustain a 2000 BOE/day production capability.

If SHE cash flow per BOE is similar to Certus in Canada then their target sustained production flow rate of 2000 BOE/D would be equivalent to 2/5ths of the above Certus O&G acquisition($28 million) or $11.2million CAD or $12.9 million AUD/year. Of course this depends on the oil price being the same once SHE reaches its Dividend target production.

David Deloub target statement
David Deloub did indicate he intends to reach the 2000 BOE/Day within 2 to 3 years. Even expressing SHE will easily reach it.

Past Posts
I think i did try to bring all of this information together in a speculative manner in the form of past posted spread sheets of what may be achievable if SHE daisy chained the drilling of the wells head-to-tail as he has done with the Certus then Gryphon well. Hopefully these will be very profitable and he will continue daisy chaining more of them reinvesting the the profits into productive profitable wells.
Guess time will tell and hence this is still very speculative.

If SHE does not daisy chain the well close together then it will take a lot longer to reach the target production rates in order to pay dividends.

Caveat:
I am a amateur investor so these are my personal estimates and in no way constitute investment advice or trading advice and best to consider this as speculation. I share my amateur insights in the hope that other will share theirs.
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Calculate don't speculate


Again thanks Danpech for your posts, always looks forward to reading them to see what i can learn.