Post by
anticline on Sep 30, 2010 10:52pm
From the desk of: Bob Lamond
Just kidding but now that I have your attention.
The good news is that 2010 is the projected nadir of production for DZR according to the last presentation. So far we may have exceeded expectations and may undershoot by 30 to 50 boe by year end. This is called hitting your targets and exceeding them ;) Remember we are expecting to exit 2010 at a low point in the 3 year plan, and so far we are there. Adding a couple more wells by year end will put us at the target and regaining some of the lost Lloyd production would overshoot the target on the positive side.
Things should improve in 2011 as further wells come on line. But seriously, I think the Lloyd production indicates a few problems with some wells. Remember that sand and water trouble was going to lead to some remedial work on some wells, and perhaps they have not responded to this work. Also remember that DZR's lands sit on the southern end of the Lloyd pool where the pay zones appear to thin out compared to the sections to the north. (That's my personal interpretation of the data)
This may be why Bob has embraced Saskatchewan - less explored compared to Alberta - and also host to the Dina and Sparky formations that lie below the Lloydminster group. The Dina may be more interesting than some may think, in that it is thought to host paleo channels with decent porosity that may hold large heavy oil pools. The key is 3D interpretation and finding one of these channels on the property(s). As I see it, the Sask. properties have nice blue sky potential. This also means that a miss-step can lead to a painful and costly error. Since Bob has had the belle of the ball, Tuscany, drilling here they have not done too badly. For this reason I think he may be shifting the focus to this area, as well as the Shaunavon and Birdbear plays. If they can get the geology nailed like Sure (SHR) has done, they have a great chance of nailing targets and exceeding them.
If they continue as now with middle of the road wells they will probably hit
.50 to
.75 per share in 2012. If NatGas stages a comeback and they can get some nice sweet oil wells they can easily hit $1.00 or better. And that my friends is why we are here.