Ann: Strong Oil Flows Exceed Expectations in Texa, page-91

re: Ann: Strong Oil Flows Exceed Expectations... Hi Johno

Ive copied something I wrote on another site yesterday that may give you a starting point regading gross income. Note this is a vertical well but the principle is the same also Im not clear on the decline rate in the Eagleford and or the expected life of the wells, the example I have given is in the Permian.

"That a tough Question as it depends on decline rates and flow rates.

If you take our first well it has an EUR of 260,000 Barrels but would be achieved over 25-30 years.

The decline rate can be steep in this type of well and a high proportion of the EUR would come in the first year.

No.1 has achieved 379 Bopd if it were to peak at that rate with say a 70% decline rate in the first year (not unusual in the Wolfcamp) it would be producing 114 Bopd a year after its peak.

It would also have produced approx 90000 BBLs in the first year with a gross income of $9 Mil at $100 oil and thats not including gas.

It would then go on to produce another 170,000 BBLs over the next 25-30 years.

Of course theres royalties to take into account.

Someone else may be able to help with the nett income per Barrel its beyond me.

On the example I have given that well would be paid off in 2-3 months from the start of production and would then proceed to be a cash cow for many years.

The well I used is on the high end of expectations Not all wells will be the same the average IP in our area is 130 Boepd from memory and expected to pay off in 10 months, I hope this may be a guide but ther are a lot of variables."

I hope you got some sleep last night.

Cheers Whisky