Cmon, I've split that graph in two. First is the wells with no production in the Dec. Qtr
Then these are the ones that have production in the December quarter
Assuming the no production ones were the non economic ones then it probably supports your comment above re water.
Also the water was higher on what we are calling the economic ones in the periods where the workovers were occurring because water was being pumped in and had to be recovered.
The knowledge and data from this activity would have some value and I hope that this knowledge has "value" that can be marketed. Originally I had thought that a good strategy in the low price environment was to become an expert at this and market it to the many other producers with old wells who are larger and probably couldn't be bothered with the smaller wells. There are 100's of these Shut in wells so whilst the individual wells are small as a collective the number is large.
Looks to me that the drilling the proposed wells were key to proving the concept and these give bigger bang for buck than the smaller workovers. The additional reserves could provide the basis for marketing the project for either capital, support debt or as Buc suggests a farmout. I guess with a farmout they could recover some of the sunk costs.
I guess this is where the fundamentals slowed things down due to the covenants etc. Also the hedges and lower producion has meant the realised price has not reflected the wti price improvement and unless production increases that will continue until those hedges expire. At the time of the first jump in prices I thought we should of taken more hedges at the high rate and then hope the price dropped and at that time close out the low priced hedges. That would have reduced the losses we are now seeing.
Have a great day, bit wet here and we need the rain
Cheers
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