Presentation - my analysis, for what is it worth.Raybay. Thanks. I didn't realize the presentation had this initial analysis, probabilities and conclusions. I am not really capable of interpreting all this and not sure if at the end, the "Rose and Associates Conclusions" can be reached.
There is a lot to think about there but my overall striking conclusion is that this is a pretty good property and it is now obvioius why they are drilling in this area. They seem to have excellent seismic data!!!! The Boise Basin looks like a high probality target (shallow and deep), good success in the area with 64% of gas wells drilled have gas shows, limited drilling todate, good pipeline infrastructure, and the economics seem to be there.
I like the sound of $16M/well, and Net Present Value > $100 M per prospect.
Can anyone help here with the analysis.
The conclusion reached by a consulting company "Rose and Associates" concludes that this is "very attractive and compares to other plays in the US" and the probability of one discovery is "93.7%.
So, two wells appear to have hit, the third I have my doubts about but they say the hit rate is about 64% of the time, and they have 4 prospects, CONCLUSION from ME - good proability of hitting gas and this company winning.
I did not see a mention of SHALE - perhaps this is an added bonus since this area has not been drilled very much before.
Any comments please.
INDICATIVE ECONOMICS
• Mean size of prospects 30 bcfg and 1,700 acres
• 10 development wells per prospect (160 acre spacing)
• Average well recovery 3 bcfg, assume average initialproduction rate 1.2 mmcfd
• At current and future gas prices, 17.5% royalty, 3.5% state andcounty taxes, undiscounted net revenue would be
$16 million/well
• Corresponding NPV10 per > $100 million per prospect