Quarterly Production was marginally below the previous two quarters which was surprising considering the number of new well that came online both at the end of the previous quarter and the Sept quarter.
What this very clearly demonstrates is that the decline rates are substantial.
The only way this business model is viable is if the oil prices is at least $10 per boe higher and that higher price is sustained over a long period of time.
At current prices the ongoing corporate overheads, interest repayments and Capex required to maintain production will always be higher than the net cash generated from the production.
I don't believe this model is sustainable at current oil prices.
I was considering buying back in if the production numbers had been quite a bit better but its an avoid for me now.
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Ann: Quarterly Activities and Cashflow Report, page-12
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