GREY:VFGGF - Post by User
Comment by
nlr2on Jan 09, 2014 3:07am
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Post# 22072740
RE:RE:RE:Hedges
RE:RE:RE:HedgesYa I wouldn't expect much from Q4. On November 27th they said they were producing 2650 with 350 shut in due to the weather. They had earlier said that they expected to exit between 3100 and 3400. So if they were able to bring that other production online they should be in the ball park. The biggest question for me is the timing of when they brought the 3 wells they drilled in the second half online. It takes two months for them to reach peak production. If they planned it right the two that were completed would peak in December and the third one would peak in January. This should barring any weather disasters have allowed them to hit 3100 BOE/D exit but with a lower average throughout the quarter. They haven't done any drilling this year either so the longer they wait the longer it is until new peak production is added. I'd imagine on any well from spud till peak it would be 2.5 to 3 months.
Biggest thing I'm looking for is obviously the 2014 budget but more importantly the debt levels exiting 2013. If they were able to suprise and have it less then 120 million I'd be thrilled. They should have earned more in Q4 then Q3 as the hedges would have been working for them as opposed to against and the operating costs should be down. Cleaning up the balance sheet is paramount if they want this company to be successful.
For 2014 some scenarios are:
2500 BOE/D average at $50 dollar netback- 45 million
2500 BOE/D at $60- 54 million
3000 BOE/D at $50- 54 million
3000 BOE/D at $60- 65 million
3500 BOE/D at $50- 64 million
3500 BOE/D at $60- 76 million
I would think that a scenario where production was between 3000-3500 is the most realistic, unless they batten down the hatches and do very little drilling all year and just rely on the waterfloods. So to get back to a 1.5 times debt to cashflow they would need debt down to around 90 million which would leave 30 million for capital expenditures this year. $4 million for 4 waterflood conversions, 2 million for random and 24 million for new drilling ( 7 wells). This is probably not realistic however so we will end up higher then the target for debt.
ofirme- what would you use as a figure for your average PRY well on an P365? around 80 BOE/D?
Bonjovi- hopefully you will see enough to get back on board. Your dillusionment with management is not at all off base with the reality of the situation. They very much need to meet some targets and prove to people they deserve the markets trust.
It will be an interesting next couple of quarters. PRY has the most extensive waterflood program for a company its size that I can think of. Be interesting to see how it pans out.