RE: RE: RE: ProductionThere is always some downside risk as the average price they are projecting may not be met if energy commodity prices continue to fall. This week the price of UK NBP declined approx. 13% between Feb. 9th and Feb. 11th. I don't have the Feb. 12th close but it probably dipped a bit further today. The Feb. 11th close is below the average price used to calculate their projected cash flow in the presentation on their website (USD $7.38/Mcf vs. USD $8.23/Mcf). But keep in mind that their projected cash flow is based on achieving an average price of USD$ 8.23 and achieving an average volume of 21.9 MM cu. ft./day. IMO, these assumptions are still very achievable and likely conservative if their new fiscal year (April 1) is used as the starting point.
One issue that doesn't seem to have been dealt with yet is line balancing. There will definitely be some form of compensation associated with this issue. Perhaps that's why they are using 21.9 MM cu. ft. per day and not 30 in their projections. Nevertheless, this single well will generate some serious cash flow for the next few years and bankroll BUK's next well.
Sorry, I know your question wasn't directed at me, but I thought I could shed some light on the situation.