BYE Chart, page-59

Thanks - being a bit over-kind there Apologies for hijacking the chart thread too!

To substantiate my comments:


This matrix shows revenue per barrel of oil on the left, and barrels of oil produced per day along the top. Figures are multiplied by 90 to reflect a quarter of production. 1200 bopd reflects the current situation, with 2200 reflecting managements statement that G1 is expected to produce around 1000 bopd. For G2 I've taken a low/medium/high approach. Given that G2 is drilling into what is perceived to be a rich oil column, the low case equates to G1 anticipated production (1000bopd), given that G1 is mostly gas bearing and likely to be outperformed by G2 in terms of oil production. Mid case equates to initial SM71 max production of around 2000 bopd for a well, with high case of an additional 3000 bopd factoring in the larger casing being used. Whilst the larger casing may have been chosen for extra borehole stability, the casing in G1 was doing just fine until rig failure. That implies to me that they think they can maximise production in this way/production would be constrained if they kept the casing at the original size.

With a roughly ten dollar cost after production and transport, I think we are realistically looking at the $40/4200bopd scenario for net receipts after hedging. It's worth noting that this matrix is purely for oil, with G1 in particular to provide significant gas related cashflow.