Major oil Liquids discovery by (Murphy Oil and Atabasca Oil + Gas)
Billions of dollars have been spent by majors proving out the durvernay resource. A play area where a major royality advantage exists with 5% royalities. Drilling cost has also significantly come down in these areas and you are now drilling wells for 6-7 million dollars.
Murphy-Athabasca Oil Example (Slide 10, Athabasca Presentation)
https://www.atha.com/uploads/presentation/2020-12-03_AOC_2021_Budget_IR_Deck_12-03-2020_FINAL.pdf
Kaybob East - 2 Well Pad 15-19 IP30 1,400 (87%) IP60 1125 (84%) IP90 1125(84%)
Two Creeks -1 Well Pad 13-31 IP30 1,300 (100%) IP60 1075(100%) IP90 900 (100%)
The well at two creeks is 100 percent oil, this is the best well in the entire basin, and it was drilled on a one off exploration basin, likely not a fully optimized drill or completion.
Oil at $62 Candian for Two Creeks suggests the following.
1300 * 62 * (30 days) = 2,418,000 first month
1075 * 62 * (60 days) = 4,000,000 end of month two
900 * 62 * (90 days) = 5,000,000 end of month three (month 4 and beyond is all Profit)
Did i mention only a 5% royality structure, where else in the world can you drill these types of wells and get off with paying only 5% royality. This is a world class competative opportunity.
So how long do you think Jim Riddell can sit on his hands with these kind of oil production numbers happening, on Pad sites that he can see from the boundaries of his land position.
2021 the Duvernay Gold Rush starts, and POU thought something was there a long time ago and waited patiently while Murphy Oil and Athabasca to spent a billion dollars to confirm their thinking.