Further Analysis.It is always good to have a balanced discussion. I think Dave has brought good perspective on the potential revenue from Well #1. There are, however, still many, many unknowns such as production pressure, value of condensate, size of reservoir, reservoir life, etc. I do think that everyone is on the same page as to this is a great well with great pressure in comparisoin to others in Texas, and that perhaps the basic case means $5M plus to the company, I am guess higher. In reference back to the presentation and report located on PXM's web site (a MUST READ) prepared by an independent consultants Rose and Associates, they suggest each of seven prospects could be in excess of $100M in revenue. They also state that the probability of one discovery is 93.7%, which it looks like we have already found at least one (if not 3 and maybe more).
They further go on to state that the mean size of each prospect is 30 bcfg and 1,700 acreas, and they have 105,000 acreas, so it is easy to see they have 7 good prospects (at least). BUT more importantly, they can drill 10 wells per prospect on a 160 acre spacing!!!. Another assumption they make is that their analysis is based on a production rate of only 1.2 MMCFD, thus coming up with $16M per well.
Take a look at the example seismic in this presentation on the second last page, if this TRUELY represents the reprocessed seismic data, all I can say is they there is the potential for a very significant gas/oil find, with many, many, many pay zones to be encoutered on almost all the holes they drill. My god, the place is littered with gas and oil horizons.
Does it get any better than this. Don't read the tea leaves, READ this report to truely get an appreciation of what PXM is doing and if I might add, doing very successfully with all wells hitting thus far, and I supect much more to come.