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Good pickup. These boys arent mucking around by drilling a...

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matyd

4,147 Posts.

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26/10/16

23:23

Post #: 20151239
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Originally posted by nammuldi ↑

Sherritt Qrtly rpt just out - below references to Block 10

Improvement in WTI and Gulf Coast Fuel Oil 6 prices in the third quarter were the main factor contributing to Adjusted EBITDA in the third quarter of $11.1 million compared to Adjusted EBITDA in the second quarter of $8.9 million despite lower production. Cuba GWI production of 14,709 bopd is down 9% from its levels in the second quarter this year due to natural reservoir declines, but Cuba NWI production is down 19% with natural reservoir declines combined with lower cost recovery barrels due to lower cost recovery spending and higher Gulf Coast Fuel Oil 6 prices. On a year-to-date basis, Cuba GWI and NWI production remain consistent with the guidance for the year.
The quarterly average Gulf Coast Fuel Oil 6 price of US$34.88 per barrel improved for a second consecutive quarter this year, and is now up 65% from the US$21.13 per barrel average in the first quarter this year. The spread between Gulf Coast Fuel Oil 6 and WTI crude has also narrowed considerably in the third quarter, continuing the trend from last quarter. In the third quarter this year, Gulf Coast Fuel Oil 6 prices averaged 78% of WTI, compared to a historical low of only 63% of WTI in the first quarter this year. Historically, with WTI around the current price of US$50 per barrel, Gulf Coast Fuel Oil 6 prices have averaged approximately 70% of WTI.
Cuba unit operating costs of $9.31 per barrel on a GWI basis in the third quarter remained low with selective activity focused on cost reduction. On a three and nine month basis this year, the oil business has generated free cash flow of $46.5 million and $47.1 million respectively. In the current quarter, most of the cash provided by operations comes from the receipt of overdue receivables, as the overdue receivables balance declined by US$38.9 million to US$31.6 million at September 30, 2016.
Capital spending of US$27 million is still expected for the year. The first well to be drilled on Block 10 was spud in mid-August this year and drilling will continue throughout December, with first results expected by year end. The cost to drill this well is approximately US$14 million of the total capital expenditure this year. This first Block 10 appraisal well follows the discovery made by Sherritt in 1994 and will be drilled horizontally to a projected depth of 5,800 metres (vertical depth of 2,400 metres). Additional disclosure will be provided after testing. Future capital spending is discretionary depending on the results of this well.

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Good pickup. These boys arent mucking around by drilling a horizontal well worth 14 mill, they are going big.
This first Block 10 appraisal well follows the discovery made by Sherritt in 1994 and will be drilled horizontally to a projected depth of 5,800 metres (vertical depth of 2,400 metres).

Last edited by matyd: 26/10/16

MEO Price at posting: 3.0¢ Sentiment: None Disclosure: Held
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Good pickup. These boys arent mucking around by drilling a...

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