This is a very odd report. I do not understand why the company would want to produce a report which in effect has no change from the last. I know the headlines show large increases but burrow down into the data and there are strange changes.
EUR's condensate down 3.9% from 779,000 boe to 748,000 boe. The company has pointed out on numerous occasions that EUR's are improving across the shale play and some of their neighbors are reporting some wells as high as 1,000,000 boe eur. The wells are reported as being higher than type curve then why the decrease?
The only explanation comes from opex causing a higher cutoff for economic production. Operating expenses up from 12,ooo to 20,000 effectively washes out the gains in oil price. Are we to assume that the company suddenly found out that the wells are going to cost 75% more to run than 6 months ago?
Change in peak oil production from 2017 to 2019 results in a further decrease in NPV due to compound interest effect/ time value of money.
It doesn't change the real outcomes of what is happening in the field and just presents an even more conservative picture but it does make you wonder if the company would have been better served producing a report later when there was enough data to support higher EUR's ect, so that the NPV figure grew.
cheers Icharus
AUT Price at posting:
$2.91 Sentiment: Buy Disclosure: Held
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