Osage Exploration made a presentation last night and an audio file has been released on the website. Notes I took from the presentation were as follows:
There's some references to "we", and that's just meaning "Osage" (I was rapidly typing out what was said in some instances). DYOR.
- Sandridge, Chesapeake, Range: producing out of an upper layer called the Mississippi Chat (carries a lot of water). Producing at 5000-7000 barrels of fluid, with ~10% oil cut and $3.5 AFE- very good business.
- However the ‘chat’ does not exist this far south, Osage only have that ‘chert’ material. Osage looked for acreage with high concentrations of ‘chert’, with proof in drilling results, however not substantial drilling like in Sandridge’s and CHK’s Oklahoma areas. [sharejon’s note: to reduce effects of depletion]
- Wolf Well: (currently in 13th month of production), makes only 25 barrels of water a water, yet produces 100 barrels of oil.
- Osage have drilled North, South, and now extending East and West,“We are very confident that every block we own is going to be productive, because everyone we have drilled so far has indicated that. We have 8 wells in production, 12 wells flowing back/awaiting frac/being drilled currently.”
- The ones being drilled are squirting oil out across the shakers, the ones awaiting frac are showing 4,000-7,000 unit gas shows….. compared to the 300-400 units of gas often experienced in the Mississippian.
- Each block should support 3-4 horizontal Mississippian wells.
- Osage have now moved to the point where they feel they’ve got a de-risked project, which is evident in the fact that they’re drilling all of this map [inside Osage’s project area] without having to make any effort to cluster wells, “because frankly we’ve been having success all over the thing”.
- We find after we get out 25,000 barrels of water, “here it comes” (referencing oil). By the time we get the ESP in, we’re looking at ~50/50 mix of oil and gas (just an estimate).
- 50,000 barrels of oil (pure oil, not BOE) is the magic number for the CEO (and majority shareholder of Osage, Kim Bradford.
- 2nd well (Krittenbrink) experienced mechanical problems and was somewhat of a “problem child” to the company, yet still paid back in 12 months.
- Davis Farms has paid back (roughly) in ~7 months
- Another well had mechanical problems and was forced to have a short lateral yet IP’d at ~250 barrels per day, Kim noted “that’s what it took to get Osage down to an average Mississippian IP- mechanical problems and a short lateral”.
It's looking brilliant in Logan County.
Presentation is found in the following link: http://www.osageexploration.com/s/Conferences.asp
DYOR.
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