Interesting times are not always the easiest.
I realised today that my oil price site is actually dynamic. I think in the past I have clicked on it read the number and quickly moved on. 6 hours ago while watching the price ranged from $50.69 to $50.99 and everything in between. Just now it is up 3% at times, varying between $51.51 to $51.26.
Whatever all that means. WBE is worth more at higher oil prices.
I reread the last quarterly tonight to see if there is much I missed.
Messina clearly states that he expects the steady state production to be boepd at 1,400 and the bopd to be 1,000 bopd.
Maybe this is what is going to happen. This is much smaller than I was hoping and from initial flows it still doesn’t make any sense to me.
That is double what was happening in January so in those terms that will be a mighty fine thing.
Fast or slow production, in the end one important factor is how much oil we get to produce from the field. The original estimate was 7 million barrels but that figure even predates Rex 1 so it is a bit antiquated now.
The last quarterly had a $500,000 income from oil and an estimate for the next quarter of $1,500,000. Don’t know if that is our 60% share or whatever, or what oil price was factored in to arrive at that number.
The gas production of 400 boepd I guess is 2.4 mm cu ft per day which at $2 could be $4,800 per day. But maybe the net is only $1 after processing charges and pipeline charges so may only be $2,400 per day, which adds up to $60,000 per month.
A 1,000 bopd at a $25 per profit is $25,000 per day about $750,000 profit per month, $2,250,000 per quarter.
You can see why companies producing mostly gas go broke very quickly.
Of course we don’t get 100% of the income until after the end of March when we will receive about 95% until the end of the year when we will own all of Wizard Lake.
And soon we will start drilling Rex 4.
Plenty of unknowns out there still. But plenty of achievements, facilities built, three producing oil wells with some gas, a pathway for 100% ownership of Wizard Lake oil field
and some 20 more oil rich Rexes still to be drilled. And cost effective drilling and completion regimes available.
The oil price collapse will dent the profit, but with $5M in the bank we should be on track to drill Rex 4,5,6 and 7 this year.
Maybe next Christmas we get above 2,000 bopd that I thought was likely now.
Saltbus
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