technical update, page-388

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boysy1

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30/10/19

07:34

Post #: 41135593
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Originally posted by cmonaussie ↑

The source company isn't relevant to OEL but the pricing might be

"Realized natural gas liquids price was recorded at $15.59 per barrel, lower than the year-ago quarter’s $35.14."

Remember the Qtrly a year ago .... the disappointment of Big Tex but the excitement of drilling Lightning (spud 4 Dec 2018). At this point in time, NGL price was pretty attractive. Why is that important?

Lightning is a gas/condensate discovery (Feb 4 2019) with "liquids yield significantly higher than pre-drill estimates", and OEL gets paid ~WTI for condensate and an uplift in natural gas price for the HHV (more MMBTU means higher HH price per Mcf) contain in the gas. We get paid a premium for the gas and the natural gas processor "separates" the gas stream at their plant (and sell NGLs such as Propane, Butane, ...). That precipitous drop in NGL pricing was confirmed for OEL in the July Qtrly where first Lightning production was sold ... NGLs received $11.08/Bbl.

There is good news however in that at least NGLs have got up off the floor and risen from $11.08 to $15.59 (don't know whether the $15.59 is representative for OEL as a whole .... the company is a major EFS player though so expect OEL pricing to be in-line roughly).

Now the question to be answered in this Qtrly coming up, with a full Qtr of Lightning production is how sensitive to the NGL price is overall Lightning production ... the BOE problem I would call it ... how large the $/delta in price (and $/delta in margin) for the BOEs coming from our 2 producing fields.

Hard to predict our liquids price uplift (as don't know the exact composition) but this is the composite price reference chart in ($/MmBTU not in $/Bbl)

or in a table for the last half

with the last number $4.62 being July ...

That's going to be a number to watch going forward (NGL pricing) since we have a second Lightning well soon. Double the opportunity or ???

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Also it would appear in the lightning 2 well they are targeting the most condensate rich portion of the interval it will be interesting to see how this pans out to pre drill expectations ....

Let’s hope it’s action station at OEL HQ and they are busy preparing some positive announcements. The krista (IR person) does need to up her game and make herself more relevant to shareholders .....

OEL Price at posting: 4.1¢ Sentiment: Hold Disclosure: Held
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