RE:2023hi Fully
Any reason why you used 25 wells for next year? Management was pretty specific in the past that they would maintain one well drilling all the time. Was there something said about that changing? If not I see no reason to take their foot off the pedal - just leave it on cruise control. 1 rig, all the time.
If they maintain the 31-34 wells per year depending on the amount of JV wells drilled I don't see why they can't grow 1500 to 2000 boe per day. That would be roughly what they added the past two years with the same drilling program. A bit of money has gone into well optimization, decline rates are falling slightly due to a flat drilling program plus mitigation efforts - i deally we would have a bit of luck on the drilling program, but just average well results should generate that growth.
NF clue on cash flow. Prices for everything are bouncing around so much that it will hurt a bit more on the gas liquids side. Still optimistic on nat gas for Q1 but not the whole year. The talking heads seem to think that the current oil price is just not pricing in future supply problems. I think 90.00 would be a great price for everyone. Not inflationary but still very profitable.
If we can pay down debt by 60+ million with production under 11,500k per day for the year then I am going to just do a lazy rule of them and say we should be able to produce 15% more in 2023 which would be at least 20-25% more free cash.
So using 85 bucks for WtI I am going to guess we gross 80 - 85 million in free cash flow. That should take debt down from about 135 million at Year end to 50-55 million. Total cash flow around 205 million, Capex of 115 million, land purchases of 10 million.
Not much progress on the net cash position expected for Q1 but end of Q2 should be the usual stellar quarter and some sort of announcement on return of capital going forward for implementation in Q3.