Kelt Exploration Ltd T.KEL

April 1, 2024 Oak Expansion

[MyHoneyPot]

On April 1,2024 kelt added 20 Mmcf at Oak. 

So we may see additional rampup in terms of production, at Oak. 

To date we have been seen addition production from Wembley, but it looks like another 3-4 thousand boe a day from Oak. 

8 wells coming on in 2024.

Pablo whats your analysis here?

IMHO

[PabloLafortune]

My analysis is I have no clue in general but especially for AECO and Station2 gas prices. In previous presentations Kelt had shared some pretty decent condensate #'s initially (IP30 IP90) at Oak but that couldnt be sustained obviously. Nevertheless, if they can get good (30%+) conde #'s in the first 3-6 mo that would go a long way. US natgas has probably hit bottom. April '24 = April

[CashFlowADay]

Kelt needs to build and own all the infrastructure at Oak to compete in the natural gas market properly.   Take a Peyto/Advantage approach there and get building so that costs are as low as possible.   What do we need to build that we currently pay for in the supply chain from Oak right now?

[MyHoneyPot]

Advantage is bone dry gas, although they have a very efficient gas plant, glacier.  Oak is more liquids rich, and to have 300 sections in a single play area that will have economics associated with scale.  IMHO

[PabloLafortune]

The thing is we dont know what deal they've made with that plant (s) (which the plant probably doesnt want them disclosing). You would think though that - making such a large commitment - they would have received pricing and reliability etc commitments that would make it agnostic to a potential buyer which as we know is Kelt's ultimate goal for all their plays. I am however continuously

[MyHoneyPot]

Hedging is one of those things, your dammed if you do and your dammed if you don't. ARC pretty wells made Kakwa marginal for 2 years with bad oil hedges, not their afraid to hedge.  IMHO

[longrun86]

I'm in agreement. As a "producer" they need to get their heads around offtake and hedging if they are going to be successful. This is especially true if they are going to take on debt to build the associated infrastructure. I don't think they market minds them paying for well development with shareholder equity, but I think that the infrastructure buildout will need some debt.

[PabloLafortune]

At least in natural gas, the process of "selling" - whether its off take, hedging, LNG head of contract, etc - has become critical to the long term success of every natural gas producer.  Thats been the paradigm shift this past 2 years - dont take my word for it, see what Tourmaline, Pioneer Resiurces, EQT, Chesapeake etc...say about this. Its arguably as important as the rest of