Unlikely as the Rangers lateral is 75% the length of the Sundance Kid and SK is shaping up as the number 1 well in the SWISH area so far.
If Rangers matches the productivity in terms of BOE per lateral foot then that will be an exceptional result but would mean production at ~75% of SK.
Below is a spread sheet detailing Sundance Kid and Jewell total monthly production numbers of oil and raw gas at the well head . I also have put up a Rangers column at 75% of Sundance Kid if Rangers emulates this well ( obviously it won't exactly) but will give an indication of potential.
Please note, NGl's are not included as are extracted at the gas plant but for Jewell currently each 1 million CF gas produces ~100 barrels NGL. After the NGL is extracted there is ~0.7 million CF dry gas left so to calculate the volumes of NGL production per month, just multiply the raw gas volume by 100 and to calculate the dry gas volume just multiply the raw volume by 0.7...... I am not sure what the gas / NGL ratio or gas shrinkage rate is for Sundance but expect it to be similar to Jewell and the same for Rangers.
View attachment 4322221So for example, in the month of November, when Jewell produced ~104 million cubic feet of gas, we can estimate it produced ~10,000 barrel NGL's and ~ 71 million cubic feet dry gas after NGL extraction.
You can see how productive the Sundance Kid well has been as compared to the exceptional Jewell well. It took longer to get to peak oil production and stayed at that level for 2 months vs Jewell at peak oil flow at one month... and the peak oil flow was double that of Jewell.
Even at Rangers producing 75% of the SD rate, considering BRK has effectively double the WI in this well compared to Jewell the effect on oil production and therefore cashflow is stark.
A peak oil Jewell produced 26971 barrels oil and at a 41.5% WI that gave BRK ~11219 barrels production pre royalties and ~8975 barrels after deducting 20% royalties. If Rangers produces at the modelled 75% rate of SD, the peak month production of ~40,000 barrels will give BRK ~32,000 barrels oil net to it's ~80% Wi before royalties, and~25,800 barrels oil after the royalties have been deducted.... over 3 times net to BRK! . Interestingly Jewell is percentage wise gassier than Sundance kid.
To reiterate, this exercise is just to quantify the potential effect the Rangers well will have on BRK production and revenue IF it matches the Sundance Kid in terms of productivity in barrels per lateral foot and the material impact.
A quick exercise... at oil at US$100 per barrel, just based on oil production alone, if Rangers flows along the lines of the 75% rate of Sundance, assuming total Rangers cost was US$9 million, after subtracting 20% royalties, how long will it take for Rangers to payout ? .... there will be material gas and NGL revenue coming in also and if you want to include that then you can use the ratio's described earlier to do the calculations .
Now we wait to get an indication of what Rangers is actually doing hopefully in the next week or two.
Cheers
Dan
(20min delay)