RE:Telegraphing.....So let's assume that Sprit River gas well was drilled also for "marketing purposes"..ie shows a prospective buyer what that zone has on Wily land...more evidence the better although isn't much exploration risk with that zone...it exists all around there. I think before a person goes futher in is it even feasinle...what are pro s and con s of selling Spirit River zone.
Cons...well I think whether a company got a simple dollar to 30M....the banks are instantly going to grab ANY money OBE could receive. Just how it is right now if being realistic. We wouldnt be able spend sale proceeds elsewhere.It would be for sure a con.
Pro's of selling Spirit River Willy rights: Obviously a massive PRO of getting any kind of money out of Spirit River is the sooner OBE will be able to term out the debt...would speed it up by weeks to months depending on what it is worth. Probably a cetain theshold of total debt we need to get too to term out at a decent interest rate. I have never been that worried even before OBE had this recent sucess because private equity will start lending in 2022 as worst case scenario.
Other huge pro of selling is we dont have the money and likely the resources to also be running a rig here. PROP now and Cardium are more then enough to develp at this point. OBE also needs to do something with Viking at some point. One thing at a time. Spirit river would be a few years out.
Other pro is it would speed up when OBE could make a buy like Entrada in the Cardium. We are still too broke in 2021 too do this but I think manageent wants to as quick as possible. Everything is linked right now.
The question is it worth selling the potential of this play and good pro and cons each way.
I think nobody can really answer that unless they knew how realistic is a cardium take over of say a Entrada if we got debt termed out...depending on the price...selling Sprit River gets us to 350M faster in 2022.
Something popped into my head. I have read every single presentation of every public energy company in Canada except the seniors and they dont matter as they would never buy our rights.
I could never really find a logical buyer for Spirit River.
But I missed a logical private company. It would make alot of sense for Westbrick Energy.
I think M&A activity will be very low because most companies have so many dirlling opportunties so no point...but Westbrick is different even though they have alot of land in the deep basin.
The difference with Westbrick Energy is .is Westbrick says the in economics of all their different "plays"
Guess which play has the best economics...BY FAR......
Willingseden Falher A has a 672% IRR and 6 month payback...Westbrick is going to focus here alot and Westbrick doesnt space their stuff that close. They really don't want hat much land in Wily for the size Westbrick wants to grow too. Our rights would be perfect to give Westbrick alot of willy spirit river rights.
The odds of this happening may only be 10-20% but I betcha it isnt zero.
The other pro OBE would get from selling the spirit river rights would be the increase in processing income at our gas plant. Could get it filled up. Gas plants run cheaper full as well cost wise.
It would be like an anutiy income stream in processing income. I few M a Q would never hurt.
We have a crafty and smart management team...they like deals so ya never know...
kavern23 wrote: So far OBE's management has given clues before on what they are planning on doing that could have lead to a person infering the results....
Example: The Peace River well spud earlier in the fall when nothing in predsentation said any PROP drilling in 2021...person should have infered from the spud we would buy PROP in hindsight.
Which leads me to this question for people on this board......
Why was this important enough to include in OCt 27 press release but no mention of it in recent update:
The Spirit River well flowed at an average rate of 937 boe/d (including 168 bbl/d field condensate) for its first ten days. This rate increased to 1,144 boe/d (including 212 bbl/d field condensate) on its twelfth producing day upon removal of its downhole choke.
Was it an oversight and just missed in the Q3 results to be talked about?
Or is some other plan in the works...regarding this.....