2t3m““Yes BUK estimate for the price of gas is:
"$9.53/mcf plus $1.20/mcf condensate quality adjustment =$10.73/mcf "
How much is it as of today's price? Much higher I guess.””
If you check today’s ICE Natural Gas Futures (UK natural gas $) they are paying 66.676 pence/therm.
1 therm = 100,000 Btu
1 mcf = 1000 cubic feet = 1,031,000 Btu (on average) = 10.31 therms
1 pence = US$0.0195
so,
66.676 pence/therm = US$13.40/mcf
so if one assumes that the UK natural gas $ holds it would generate 1st year daily CF of ($13.40 mcf)(30,000 mcf/d) = US$402,000/day or US$140.7 mm/year (350 production days, 2 weeks off for yearly maintenance).
Since the Durango condensate was 61 API, it will get a heavy premium to Brent oil. Brent oil is based on 38.5 API. The condensate should net close to US$8-10 more than Brent oil due to the large difference in API quality of the two liquids.
Using today’s Brent oil price of US$130/bo and adding $10 in premium to that it’s another $140,000/day or US$49 mm/year (350 production days).
So total net CF would be US$542,000/day – operation costs
or US$189.7 mm/year – operation costs.
“Even with a higher mcf price and 350 bopd more then expected, aren't we far appart from 356 000$?”
Don’t assume that production flows will be the same as flow test results. That is a mistake that everyone makes. They never flow at the same rate. Management will produce at the optimal flow in order to recover the greatest amount of reserves. If they say 30 mmcf/d and 1,000 bcd (6,000 boed total) that is what should be assumed.
Flow rates and production rates are always different b/c of the different choke sizes and other variables in equipment that is used between the two. A larger choke size will always yield a higher flow rate and lower pressure than a smaller choke size. Today’s NR illustrates this beautifully.
In some fields pumps are used to crank up the production by 3 times or greater than the flow tests. IAE is using this method with their vertical wells in their Athena development. Wells that flow tested 1,250-1,375 bod/well will go on pump and are expected to produce at 5,000 bod/well.
OIL flow tested 4 Brenda horizontal wells at about 44,000 bod (combined) and they (combined) began production at ½ of that.
It’s all a matter of what the reservoirs can take and how management wants to maximize the ultimate recoverable reserves from a field.
All the flow test tells you is that the field is commercial, what types of hydrocarbons are present and the quality of those hydrocarbons.
Today’s results would have been even better then what was reported as the flow test was restricted by the test equipment available. That tells you that the well could have done better than it did, but due to limitations of the testing equipment they had to hold the flow back. And it still did 8,424 boed on a 1 inch choke.
That is all management needs b/c it tells them that even if could do more than what it did they will be comfortable in producing it at 6,000 boed just like they told the market. To the higher flows are a justification to what they've been saying all along.