RE:RE:RE:RE:Some Big Numbers...for comparisonYou seem like quite a knowledgable person !! You know who else might be kind of knowledgable....Haywood securities...who just announced a 36 million dollar bought deal that is to close within 2 weeks at a higher price than the current SP. I do not like these predictions of 150-250 but there is no reason this can't be 20-30 a share within a few months if these holes and reserves prove up to what some estimates are. Do you not agree ??
TurnToTheRight wrote: Definitely not indefinitely. But SP valuations are being thrown around that rival CNRL (>1 million bbl/day production). My guess is exploration activities well into 2022, and 1-2 years of appraisal activities (there is some production there, but not much). Then the development phase (2-3 years off likely), which needs to include surface facilities and pipeline/midstream infrastructure (which also takes time). Development is a slow and steady process, you can't build facilities capable of 1 million bbl/day because it is onshore (geographically spread out and wells are not designed to produce as much as offshore wells) and the capital necessary to build that plant would likely not pay off using NPV and discounted cash flow analysis.
if we do a little math: say each well produces 1000 bbl/day and RECO has a 50/50 JV so net 500 bbl/day production. RECO requires 200 wells to produce 100,000 bbl/day. Each well takes 10 days to drill and 5 to complete. Those 200 wells take 1300 days (3.5 yrs). Assume 5 rigs, and you're down to just under 300 days, and that doesn't include rig move and rig up. You also need hand over time, commissioning, and facility integration & construction. This is gonna take a while, and that's for only 100,000 bbl/day. And people here are saying valuations akin to 1 million bbl/day producers that took decades to build (like Conoco or oxy).
these numbers are only an example and are no way my educated guess as to what will likely occur. But I hope to give some posters on the board some perspective that it takes time, resources, and expertise to get to the meaningful production stage. Yes RECO has a ton of value, but most of it for the near future is in the form of reserves, which is not nearly as valuable as production.