"They actually said no work over rigs were available so wells would be plugged until work over was possible so they can get the most out of each well, if you read their prospectus they have a specific method of getting oil out of the ground which is by stimulating each oil pay zone in sequence."
From all the points that have been made I am now down to this work over issue.
If production is at 10 BOPD and not 25 because only 35% of the field is producing and this problem is solveable and scaleable then this makes a massive difference. I may even purchase in the future
So the first issue is why are 65% offline. Is this a characteristic of the field in that they will have to work over every well around every 2 years.
The questions are then 1. How much does it cost for each work over. 2. Can enough people with the right skills be found to do this many workovers
also when say they scale up to 200 wells plus can work overs on this many wells be managed.
And the issue that makes me cautious is why is only 35% of the wells in production. Surely this was not the plan so some other unknown factors must have occurred to cause this situation
It seems totally absurd to me to drill new wells while existing ones are not working.
It's like having 100 employees with only 35 working and you continue to hire more people.
So their are only 2 conclusions
1. Management are incompetant 2. Some unforeseen factors caused this situation 3. This was the plan in which case 1 applies
I would hope the answer is 2 So what was/is the problem and can it be fixed.
FDM Price at posting:
$1.04 Sentiment: None Disclosure: Not Held
