trader,firstly, calm down mate, you'll burst something. then we...

trader,

firstly, calm down mate, you'll burst something. then we won't be able to continue our invigorating discussion.

which ever way you cut it, Aurora did not meet their end of year target by a long way. I'm not the only one who is bringing up these issues (do you also think so badly of Morgan Stanley?).

If AUT were not aware that these wells required working over, then that would be a concern, regardless of whether they are Operator or not.

i agree the play is proven long term for some vertical wells (as your plot shows). this is a very small sample set of the very best wells from the Eagle Ford and was being used as promotional material for EOG. you know perfectly well that all shale wells do not behave like this.

But the play is not proven long term for horizontally fracced wells. There are documented risks that the fracs eventually close up and reduce production. Then you need to re-frac, which is costly and reduces profitability. re-fraccing hasn't been acocunted for in NSAI's economics.

yes, gas lift will likely improve EUR, but you can't deny it will cost money and it is typically not a small cost. There is no mention anywhere by Aurora about gas lift plans, so my assertion is that the wells may be less profitable than originally estimated, because AUT had not accounted for gas lift costs in their original calculations.

regarding decline curves, i agree that hyperbolic curves are commonly used for shale wells. but there is still no 30 year data available to show how horizontally fracced wells perform. its too early to tell what sort of decline they will follow.

take a look at the average AUT well performance and tell me what sort of decline curve they follow? the well data suggest an exponential decline so far, but that may change over time.

look mate, im not trying to say that AUT are totally crap. in fact, the Eagle Ford shale has been documented recently by Woodmac as being basically the only profitable shale play in the US, due to the high liquids content.
I'm just trying to highlight the fact that there are additional costs and risks that are not being taken into consideration.