fairway's project

I've just had a look over some of the old announcements regarding the BOA 12#1 well.

They only perforated a 2M interval in the Fusselman formation. Which was then stimulated with acid.

The result was production of approximately 120 barrels a day, with only a 5% oil cut resulting in production of between 6 & 10 BOPD the rest being water.

As you will have noted the Darwin #1 well only produced oil and gas on test no water.

We have no idea if the wells to the south west produced any water or not.

With no water production costs are obviously lower as they don't need to dispose of the water.

Expectation as to EUR's is very low at 80,000 boe for the Fusselman zone.

I've not seen a "normal" Fusselman decline curve so have no idea just how quickly production will tail off.

However if I apply the sort of normal shale field decline curve of say 70% during the 1st year, production levels are interesting.

A 60% WI translates into a 45% NRI. Take off LOE and they might get about $85 a barrel.

Say production of 200 BOPD for the 1st month, is 6,000 barrels, 5250 for the 2nd month, 4600 for the 3rd month.

That's just short of 16,000 BO over the 3 month's which is a net 7,000 BO to TEX.

After 9 months, we're looking at gross production of 32,000 BO, and over 36,000 for the year.

Well cost's are going to be under $1.5M prior to the Wolfberry frac which will cost @ $0.5M

So initial payback is going to be under 5 months !!! :) :)

Going by these figures @ 45% of the EUR's would be produced in the 1st year.

It would be very helpful if the Company gave us some guildance as to a fusselman decline curve and what they expect the EUR's to be given the high initial rate of production. Drainage area per well would be useful to.

It might be possible to have 16 of these wells on that 1 640 acre section.

They also have a large lease area another 3 miles east of Darwin. So if that has the same sort of Fusselman production then it would be good.

Part of the reason for the lack of zoom on Friday has to be with the small EUR numbers currently for the Fusselman zone.

Will be interesting to see what they say on Monday/Tuesday about flow rates of both oil and gas.

LOTM