Kelt Exploration Ltd T.KEL

What is a fair expectation of production?

[CashFlowADay]

Given this:

 

"In its Wembley/Pipestone Division, during 2024, Kelt expects to drill 16 (gross) and 16.0 (net) wells targeting Montney and Charlie Lake oil horizons. The Company plans to have three multi-well pad development operations consisting of four wells, five wells and four wells respectively as it prepares to add production upon start-up of incremental gas processing capacity. Kelt expects to increase firm service raw gas processing capacity from 37 MMcf per day to 109 MMcf per day over the next 15 months. The Company has entered into gas processing arrangements with certain midstream companies that are building a new gas processing plant and expanding an existing gas processing plant in the area. The additional 22 MMcf per day of firm service processing capacity that was anticipated by Kelt to become available in the first quarter of 2024, could become available in late 2023. The remaining 50 MMcf per day of firm service processing capacity is expected to become available in the fourth quarter of 2024. 

 

New production additions at Wembley/Pipestone resulting from increased gas processing capacity is expected to increase the Company’s oil and NGLs weighting as this production is expected to be 57% to 62% weighted to oil and NGLs.  "

 

 

How much can we expect from each well?  600 - 800 x 16?    They likely ended 2023 producing low 30s maybe 31k or so before the wembley capacity kicks in

[MyHoneyPot]

I would say this, in Q3 there was a MaMahon turn around that shut in almost 5,000 boe/day for a portion of Q3, they also had issues at the Tidewater gas plant. Tidewater was not resolved until sometime in Q4.  The impact on Q3 production was approximately 2700 boe/day.  So in Q3 they had the capacity to produce was 28,179, adding 2700 boe/day that means in Q3 Kelt could of produced 30

[Seppelt]

Production estimates or guidance are in the company's q3 report and latest presentation. Based on $350 capex, 2024 average annual production 36,000-39,000 boed. I have no issue with that and, if any changes, these numbers will be updated. What I would like to see is individual production numbers for each area, or at least the most significant areas. For instance, as a minimum Wembley/Pipestone

[MyHoneyPot]

I agree, i have kind of pieced it together but to know for sure the numbers or if they reported them by area it would be a lot more transparent.  I believe OAK was around 5000 boe Q3 because of its impact as a result of the shutdown.  I belive that Wembley is around 58-62% Liquids and gas capacity is 59 MMcf so you can caculate the theoritical production, and i believe they are using

[Seppelt]

Some analysts do their own calculations but most investors don't and they don't trust analysts anyway. The company must illustrate that it has a focused area of production. Showing the huge acreage spread like broken glass and total production only is not enough. Never mind Oak, I hope that the company will start reporting production from Wembley/Pipestone and all the details. Sooner the

[PabloLafortune]

As they've already broken down the plant capacity by region, the next logical step would be to report production by region as well. I'm still unclear about the relationship between plant capacity and actual production. Notwithstanding downtime, the current Wembley plant capacity assuming 60% liquids suggests 24,000 boepd. That would be more than triple what they reported for Wembley in

[CashFlowADay]

You guys can email them, they could use the commentary with how to improve their deck.   It is a poor deck but a great company.  We are finally turning the corner and production is going to come fast.  Wembley is basically as premium as it gets for production in north america.  Kelt has 1 big tranche coming now then another in Q4 2024 or Q1 2025.  Itll be a COMPLETELY

[MyHoneyPot]

100% agree, it just a waiting game right now.  The one other wild card is this, during Christmas Altagas announced at the closing of the tidewater purchase, additional plant expansion starting in 2024, Kelt has not done any kind of update since christmas, so we don't know if they are getting additional capacity from that expansion.  So perhpas, and this is just speculation that

[PabloLafortune]

FYI MHP, the November presentation had 109MMcf of gas processing capacity @ Wembley, and 107MMcf @Pouce Coupe et al... The January presentation has 124MMcf and 117MMcf of processing capacity @ Wembley and Pouce Coupe respectively. Meaning is, combined they've added 25MMcf of gas processing capacity.  No change @ Oak.

[PabloLafortune]

I think what we're all saying is, they should target long term oil & gas investors looking for intrinsic value (since Kelt is off the radar of those looking for free cashflow, dividends and/or buybacks). In Kelts case, that means the parts are worth more than the whole from a boepd basis. Therefore, they should provide more info. on each play to attract more of the intrinsic investors and

[longrun86]

You have laid this out perfectly. This is why I am a Kelt shareholder. I don't need a monthly dividend and am concerned about long term capital appreciation. Kelt's team thinks of value creation a bit differently. I feel that a lot of producers get stuck in the BOE/D mindset and that can be destructive to shareholder capital. Rather than maximizing shareholder value they end up empire

[CashFlowADay]

Wembley going to sell in 2025 I think.    Anyone who follows the past sales in the area outside of pipestone scam... extremely lucrative.    https://www.globenewswire.com/news-release/2018/08/09/1550104/0/en/NuVista-Announces-Acquisition-of-Premium-Pipestone-Asset-419-Million-Equity-Offering-and-Growth-Plan-to-Over-110-000-Boe-d.html