RE: Production targetI havn't got any own calculations, but I found this on another board, comments are welcome:
Was really surprised TAO barely moved today. I’ve tried to put the pieces together from their various news releases over the past 6 months. I think once the CPF is completed in mid 2011 people will be very surprised with production going forward.
Q3 2010 production – 840 BOE / d (oil). Up from 570 BOE /d in Q2 2010 due to workovers. Assume this production averages 500 BOE / d in 2H of 2011.
Cheal-B1 – Hz well tested at 400 – 500 BO / d (oil). Following testing TAO re-entered well and perforated another 225 m. to “optimize” production. Testing from this latest re-entering is still in progress. Assume Cheal-B1 will produce 500 BO / d in 2H of 2011.
Sidewinder-1 – After testing, TAO stated their modeling has this well IP’ing at 10 M cf /d (mostly gas) and still producing over 5 mcf / d after 36 months. Assume Sidewinder-1 produces 1400 BOE / d in 2H of 2011. Gas priced at about $7 US.
Cheal-B4ST – Found 55 feet (oil) of net pay with “excellent porosity and permeability”. This was announced on March 3, 2011 and testing is still in progress. Assume Cheal-B4ST produces 400 BOE/ d in 2H of 2011.
Sidewinder-2 – Found 154 feet of net pay (Oil & gas), intersecting some of the same zones as Sidewinder-1. This is over 3 times the net pay found in Sidewinder-1. Assume Sidewinder-2 produces at 1400 BOE / d (same as Sidewinder-1) in 2H of 2011.
Add this up and we have TAO producing 4200 BOE /d in 2H of 2011. Also, TAO has budgeted 7 more wells to be drilled in 2011, in addition to those above. These wells will go after additional Sidewinder and Cheal targets. Assuming the recent drilling success continues and calculating a “best case” scenario by year-end 2011. We could have 3 more Sidewinders (at 1400 BOE / d each) and 4 more Cheals (at 400 BOE /d each) or an additional 5800 BOE / d.
These are onshore wells with TD of about 6000 feet, so they are relatively inexpensive to drill and complete.
So to summarize we have:
- a $334 M. market cap company, fully funded to drill in 2011, with no debt.
- Relatively cheap D & C, and nearby infrastructure.
- In a stable country with minimal geopolitical risk.
- Producing between 4,200 BOE / d ($79,500 / flowing barrel) and 10,000 BOE / d ($33,400 / flowing barrel) by year-end 2011.
- And we haven’t even mentioned the 100% net WI in over 2 M. acres of the East Coast Basin, with its 12 B. barrel oil potential..
I bought more today and if things unfold like I think, I’ll be holding them for some time.