RE: RE: RE: Rumination Yes your post is so much more informative and relevant. I am happy to engage in realistic debates and opinions on this story with facts as available. Apparently you are incapable of providing any actual sound arguments or comments to support your position whatsoever based on the take a lithium comment? After ongoing extensive technical and economic research I offer the following comments.
The IOG lease stays with the corporate entity so the buyer would assume the assets with liabilities. The new owner would also need to spend a considerable amount of cash to convert the option lands into leases over the next 3 years. The capital liabilty to maintain the unearned leases would likely be treated as debt or liability in assessing the value of the farm-in to BWD. Given BWD's limited capital resources the residual value of the land after the costs would likely be further discounted in a deal evaluation.
To the post estimating value of $36 mm, you clearly don't have a clue about the concepts of time-value of money, net asset value and harmonic declines. But as a kindergarden level introduction, all wells in this play will decline harmonically meaning the first 30 days will be the best it ever gets and then rapidly decline to relatively long life reserves at 20-30 bbl/d if they are lucky. Look at the Cardium tail-end rates for guidance although the Cardium is a much higher quality reservoir with more insitu permerability and free porositiy which will enchance production and ultimate reserves.
These wells are likely to get 100 - 120 Mbbl of reserves over their lifetime of 30-40 years. Real investors and the engineers look at discounted cash-flow which essentially means oil produced 25 years from now has little or no value in today's dollar terms. Legacy has the best disclosure of realistic type curves of 130 Mboe with NPV10% of $ 3 mm. For the non-experienced O&G people, that means you spend $2.5 mm in capital today and the future value of the cash-flow with 100% success from the well is $3.0 mm for each well drilled. The undrilled land is going for $1000 - $1500/Ha overall right now but momentum has slowed considerably with much of the more prospective lands picked up long ago. The $36 mm number quoted somewhere in here made me laugh with the naive nature of the post and should not be taken serioulsy as a representation of anything real!
Many of the early wells have experienced very high water cuts, as an engineer in the business I have all the access to information and can back up the belief of high water risk with actual facts. I challenge those posters on this board with evidence to the contrary to post some facts. Simple challenge that you put to me, your turn to put up or shut up.